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-- Posted Friday, 6 July 2007 | Digg This Article

COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER SEPT   -- $349.10.00 - $370.50	NYMEX CRUDE OIL  JULY    - $69.20 - $73.20
GENERAL MARKET CONDITIONS
Gains in illiquid markets are never sustainable. Gold, silver crude oil as well as bond prices fell on profit taking. In a volumeless market a few big deals can change the direction for a few days but is not long lasting. This is what happened with precious metals. Trading volumes are off the peak as summer trading begins in USA. Trading volumes will start to pick up from next week, but will be lower for the rest of July. Bonds are dictating gold and silver than the US dollar or crude oil. The surge in US ten year yields over five percent resulted in the sell off in gold and silver. Gold and silver will have a direct competition with bonds over the next eighteen months as they are safe haven investment destinations and are a margin hedge against inflation.  It’s a liquidity driven markets and investors are on the look out for alternate sources of investment and gains in once source of investment will result in fall in another. There is a direct correlation between treasury prices and gold and silver prices. Physical demand for gold is subdued in northern and western India. There is good silver demand in states of Maharashtra and Gujarat particularly in small towns which according to silver jewelers in these states could last for the whole of July. Gold demand is there, but not exceptional.   Expect more interest rate hikes by the bank of England and European Central bank. In US yesterday’s ISM numbers suggest that the Fed will not cut interest rates in 2007. Interest rates differentials will be negative for the greenback. However there will be profit taking at higher levels. Equity markets are firm and not showing any signs of a correction. They are driven my mergers and acquisitions. The lagging effect of higher interest rates will certainly trigger a correction in the next few months. As far as gold and silver are concerned they are not out the woods yet and have room for further losses.
SILVER -- SEPTEMBER FUTURE
A break of $1277 will result in $1308 and $1336. On the lower side $1235 is the initial support with $1202 as the key support.
COPPER -- SEPTEMBER FUTURE
Copper can target $369.30 and $378.20 on a break of $360. Only a consolidated fall below $347 will result in $337.60.
Happy Profitable Trading & Have a Great Weekend
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-- Posted Friday, 6 July 2007 | Digg This Article

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