-- Posted Wednesday, 6 June 2007 | Digg This Article

Precious Metals Market Update for 6th June,  2007
GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $677.00	COMEX SILVER JULY FUTURE -- $1379.00
EXPECTED TRADING RANGE
GOLD JUNE -- $670.00 -- $683.20	SILVER  JULY  -- $1344.0 - $1404.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY   -- $332.10.00 - $352.00	NYMEX CRUDE OIL  JUNE    - $64.20 - $68.20
GENERAL MARKET CONDITIONS
The European central bank meeting has resulted in currency traders as well as precious metal traders to remain on the sidelines. European central bank chief Trichet is under political pressure not to raise interest rates in future. Markets have priced in a twenty basis point hike today. Only if the ECB chief confirms of another rate hike next meeting that the euro will rise else it will more of a technical trade for euro. The US dollar is getting buoyed from foreign currency reserve diversification.  It is confirmed that Syria will be dropping their dollar peg.  They are the second country to do so in the past two weeks.  On May 20th, Kuwait switched to a basket of currencies.  Both countries have blamed the weak dollar for boosting import costs and inflation.  Foreign currency reserve diversification is being followed by most of the central banks but dropping the US dollar peg especially by crude oil rich Middle East nations should give dollars bears a time to rejoice. In our view the Indian central bank should also use a part of the huge $200+ billion foreign exchange reverse for infrastructure as Indian still have to grapple with more than four hours of power cuts in the summers especially in rural areas. Highways and expressways are being built but the pace of work is pathetic. To sum it up the long term weakness in the US dollar is here to stay, there will be pullbacks which will not alter the trend. Gold and precious metals are an excellent long term investment and only liquidity risk could result in short term bear trend.   Gold and silver are on the verge of a break out and failure to edge higher today will result in one percent to two percent fall. Dow Jones fell more than half a percent yesterday and only if they fall further today that it could spark a few days of fall. Nickel fell yesterday. Steel and nickel prices are directly related and there may be on the verge of a cyclical downtrend on lack of demand.
GOLD -- AUGUST FUTURE
Gold needs to break $679.10 for $684.50 and $688.70. On the lower side a consolidated fall below $671.40 will result in $663.50.
SILVER -- JULY  FUTURE
Silver needs to hold $1374-for $1400 and $1432. On the lower side $1354 is the initial support with $1339 and $1319 as the key support.
Happy Profitable Trading
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-- Posted Wednesday, 6 June 2007 | Digg This Article

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