This firm trend in gold, silver and other precious metals and base metals will continue along as the carry trades live.US and global equity markets are rising on the back of ever rising carry trades which is supporting gold and silver. Carry trade is nothing but a paper market, a bubble waiting to be burst but which is being delayed by various central banks. None of the countries would like their equity markets to fall as rising stock prices aids consumption and growth. Whether it’s the Fed or the reserve bank of India, all the central banks are behaving in similar way. The stock markets are a bubble waiting to be burst which may happen towards the close of 2007 or early 2008. Central bankers efforts to ensure a rise will be rendered useless.
The key technical support levels have been holding this week and gold and silver have pared some of their early losses. Today gold, silver and copper should test the key short term resistances and failure to break the same will result in wider trading range next week. We continue to remain bearish on the US dollar and bullish on crude oil prices which should support gold and silver prices on higher investment demand. Physical demand of silver rose sharply in different parts of India on higher retail demand. Investors were also seen investing in physical silver in India on expectation of further gains.
GOLD -- AUGUST FUTURE
Gold needs to break $670.50 for $674.50 and $679.10. On the lower side a consolidated fall below $663.50 will result in $657.50.
SILVER -- JULYFUTURE
Silver needs to break $1368-$1374 for $1400 and $1432. On the lower side $1339 is the initial support with $1324 and $1312 as the key support.
Happy Profitable Trading
Please mail all your gold, silver and copper queries to insigniaconsultants@gmail.com. I will try to answer them over the weekend.
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