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-- Posted Monday, 11 June 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $655.00	COMEX SILVER JULY FUTURE -- $1315.50
EXPECTED TRADING RANGE
GOLD AUGUST  -- $646.00 -- $663.20	SILVER  JULY  -- $1288.0 - $1343.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY   -- $317.10.00 - $333.00	NYMEX CRUDE OIL  JUNE    - $63.20 - $67.40
GENERAL MARKET CONDITIONS
This is a very crucial week for metals as well as equity markets as we near the June end Fed meeting. The first week of June, bulls lost their grip on metals. Failure of the metals and energy to edge higher could result in testing of key medium term support.  The same is for global equity markets. We had mentioned in one of the May daily reports that we expect a correction of nearly fifteen percent from the May’s high in global equities. Last week global equities corrected nearly percent and a lower close this week could result in another round of sell off between before the Fed meeting.    Markets have a complete U turn on US interest rates and now expect the Fed to raise interest rate as early as December. Earlier markets were expecting the Fed to cut interest rates in December and to maintain a status quo in June meeting.  This resulted in stocks and bond markets tumbling simultaneously. Suddenly out of the blues investors started investing in the untouchable treasuries.  In our view traders will be on the sidelines and will be comparing the US and eurozone economic numbers to decide on US interest rate. The second quarter stronger growth is cyclical and more due to lagging effects of a weaker US dollar. We expect that the Fed will cut interest rates in December and maintain the status quo for the rest of the time.    European central bank (ECB) did not surprise the markets and raised interest rates by a quarter of a percentage. The ECB chief did not explicitly specify when the next interest rate would be done which resulted in losses for the euro.  We expect the ECB to raise interest rates by fifty basis points between September and December 2007.  The ECB like most central banks has to maintain a fine balance between interest rates and growth and only future incoming growth and inflation numbers will confirm the timing.  Options markets are pricing in a fifty basis point rate cut in 2008.   A volatile week in the offing with a tug-O-war between bulls and bears. Fears of higher global inflation and higher global interest rates has resulted in rise in global treasury yields can vanish if future economic numbers from US and Eurozone are below markets expectations
GOLD -- AUGUST FUTURE
Gold needs to hold $646.70 to prevent further losses to $637.80 and $627.90. On the higher side the earlier support of $657.40 is the initial resistance with $661 and $663 as the key resistances
SILVER -- JULY  FUTURE
Silver needs to hold $1304 to prevent further losses to $1292 and $1277. On the higher side $1324 is the initial resistance with $1339 and $1354 as the key resistances.
Happy Profitable Trading
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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability
for any losses incurred in connection with any decision made, action or inaction taken by any
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errors in, or omissions of Information.

-- Posted Monday, 11 June 2007 | Digg This Article

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