-- Posted Wednesday, 25 July 2007 | Digg This Article

SILVER SEPTEMBER TECHNICAL LEVELS
SUPPORT				RESISTANCE
S1	S2	S3	S4	R1	R2	R3	R4
$1,289.00	$1,301.00	$1,313.00	$1,326.00	$1,352.00	$1,368.00	$1,386.00	$1,401.00
GENERAL MARKET CONDITIONS
The US dollar’s gain and subsequent profit taking in gold, silver and other precious metals is due to risk aversion ahead of Japanese elections next week. Fall in global stock markets between 1.50% to 2.00% acted as fodder for the bears. Reminds me of February 27, 2007, but it’s too early to jump to conclusion. Gold, silver, crude oil, copper, lead and equity markets all had a great July, and the current fall is more of a profit taking which if it continues into next week could mark the beginning of a short term bear run.   Yen is trading near 120.00. It is trading between the 100 day MA of 120.42 and 200 day MA of 119.58. Six media polls showed Prime Minister Shinzo Abe's Liberal Democratic Party will lose control of the chamber, which has the power to block legislation. The elections are on 29th July. There is some risk that the Japanese prime minister may resign if there is a landslide loss. If yen is able to hold on to the 200 day MA of 119.58 this week and there is political instability in Japan next week, bank of Japan may not raise interest rates next month and carry traders could force yen to weaken to 125.0 against the US dollar and other major currencies which will be bullish for gold, silver and other precious metals as Japanese investors diversify their investment away from their home country.   One should keep in mind that every metal has a speculative element between ten percent to thirty percent and that if metals fall within this range, its more due to reduction of speculative interest and that fundamental bullishness will remain intact. Please keep in mind while making any investment decision that no one is invincible. Gold had fallen from the high of $730 in 2006, nickel has pared most of 2007’s gains. However if the fundamentals are strong the successive lower base of that investment will get higher will passage of time. I am writing that for the Indian investor who got carried away and has been stuck in nickel and lead long positions in the Indian commodity exchanges. Momentum trading is fine, but please use stop losses.   The next two days are very critical for gold and silver as they are being dictated by crude oil prices. The bullishness trend is intact as key technical support has been holding. I still prefer to exercise a degree of caution while investing at the current levels.
SILVER -- SEPTEMBER FUTURE
Silver failed to hold $1354 and needs to break and hold the same for $1372 and $1389. On the lower side technical congestion between $1317-$1324 is the initial support with $1307 and $1287 as the key support. The 100 day MA of $1326 is the key support.
NYMEX CRUDE OIL -- AUGUST FUTURE
Crude oil needs to hold $72.07 to prevent further losses to $69.80 and $67.95. On the higher side n$75.60 is the initial resistance with $77.40 as the key resistance.
Happy Profitable Trading
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-- Posted Wednesday, 25 July 2007 | Digg This Article

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