Metals and energies are getting a boost from a weaker US dollar and rise in US equity markets. A very positive sign in the making, but do not get swayed, rather use a slightly higher trailing stop loss. The number of lay off that is being announced in US after the credit squeeze is a cause of concerns. If companies fire more and hire less, US consumption as well as growth could near recession. US dollar is bound to depreciate and gold will get the maximum benefit of the same.
The aftermaths of the US credit debacle is yet to come out fully. It has been controlled by all the central banks pumping billions of US dollars every day. The longer they continue to do the same, the greater will be the bust.Historically, central banks have always reacted more than needed and they have not been to control the bust cycle. The same will be repeated this time. The difference is that global growth rates are not dependent on US. There is China, India and the rest. Nickel, steel and lead will benefit on higher global growth.
Gold and silverwill get chopped between crude oil, US dollar and equity markets. Gold is being supported by demand at lower levels.Physical silver demand should start to rise at lower levels as traders increase inventories before the festive season.
GOLD -- DECEMBER FUTURE
Gold needs to hold 400 day MA of $658.80 to prevent further losses to $650.0 and $644.0. On the higher side the earlier support of $676 and $683 are the resistances.
NYMEX CRUDE OIL --FUTURE
100 day MA of $67.16 is the key support. Resistance at $73.75.
Happy Profitable Trading
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