-- Posted Thursday, 28 June 2007 | Digg This Article

COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER SEPT   -- $326.10.00 - $339.90	NYMEX CRUDE OIL  JULY    - $67.20 - $69.72
GENERAL MARKET CONDITIONS
Gold and silver were just tracking the yen yesterday. Yen managed to hold key technical support of 122.20 and spot gold also at $640. Today it is the Fed day. Markets have factored in the best possible scenario for outlook of US economy and interest rates. Even if the Fed surprises, it will not affect the US dollar positively. Rather it should be case of “Sell the rumour, buy the Fact”. Global equity markets, commodity markets in my view should rise if they are able to hold on to the key technical supports. The only risk is further unwinding of yen carry trade.   Crude oil and base metals rose on shrinking global inventories. It’s same old story of strike and strike threat by mine workers and robust global growth in the next six months of 2007. Copper was also supported by backwardation in prices. Most of the base metals have managed to hold on to key technical supports and that the buy on dips strategy is working very well for traders. Unless global growth shows some form on contraction or liquidity reduces, base metals will trade with a firm bias in the medium term, subject to technical levels.   US treasury secretary Paulson has said that the recent rise in global interest rates could be a positive wake-up call for investors after a period of loose money and market excesses. He also said that the subprime mortgage mess that has hurt investor sentiment for risky assets in recent weeks was a symptom of the excess liquidity that was sloshing around financial markets in recent years. I remember the time when John Snow was the US treasury secretary and in his tenure whatever he said the reverse happened. I called it the “John Snow’s rhetoric”. It seems Mr.Paulson is following his predecessor’s footsteps and that he also wants loose money to float as long as possible and US equity markets to rise as long as possible, so that US gets its daily dose of $1.50 billion and more to run its economy. The US dollar is being dumped from a snails pace in 2006 to a slightly faster pace in 2007 which will increase more as we near 2008 US presidential elections. Gold and other precious metals will be the market outperformer, and that short term corrections are a part and parcel of a long term bull run. Technically gold and silver are not out of the woods yet.
GOLD -- AUGUST FUTURE
Gold needs to break and hold $647.40 to once again target $652.50 and $657.50. On the lower side $642.10 is the initial support with $637.40 as the key support.
Happy Profitable Trading
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-- Posted Thursday, 28 June 2007 | Digg This Article

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