-- Posted Thursday, 17 May 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $664.30	COMEX SILVER JULY FUTURE -- $1300.00
EXPECTED TRADING RANGE
GOLD JUNE -- $652.00 -- $669.50	SILVER  JULY  -- $1266.0 - $1332.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY   -- $332.10.00 - $349.00	NYMEX CRUDE OIL  JUNE    - $60.00 - $63.40
GENERAL MARKET CONDITIONS
Speculation that bank of Japan may raise interest rates sooner than later resulted in unwinding positions by the carry traders. This resulted in sharp fall in precious metals prices and base metals with a technical break down adding to the woes of the bulls. In the currency markets, selling in order to protect knock out options add to the gains of the US dollar. In our opinion the bank of Japan will delay its interest rate hike and that the current Japanese economic environment does not show evidence to raise interest rates soon. Economic numbers from Japan are mixed. Investor and trades are nervous and are trimming their long positions in gold, silver and other precious metals and base metals.   My only cause or worry for gold and silver is the fall in base metal prices. The first quarter of 2007 showed strong and robust global growth which was aided by warm weather in the Northern hemisphere. I still have my doubts as to whether the same could be repeated in the remaining quarters of 2007. If that does not happen then precious metals demand supply equation could change which will negatively affect metal prices. Further if there is a sharp reduction in global liquidity over the next few months then demand from exchange traded fund (ETF) will also fall.   There are huge long positions at higher levels in India both in gold and silver. Traders will use the rise as an opportunity to exit long positions. However there could be technical bounce today. The year on year returns for gold and silver in Indian rupees terms has become negative which will deter Indian investors from investing in precious metals.
GOLD -- JUNE FUTURE
Gold needs to close over $657.40 to prevent a fall to $646.00 and $631.10 over the coming weeks. On the higher side only a break of $668 will result in gains to $674.
SILVER -- JULY  FUTURE
Silver needs to close over $1284 to prevent a fall to$1237. On the higher side $1314 is the initial resistance with $1332 as the key resistance.
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-- Posted Thursday, 17 May 2007 | Digg This Article

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