-- Posted Thursday, 27 September 2007 | Digg This Article

GOLD				SILVER
COMEX GOLD DECEMBER FUTURE -- $734.60				COMEX SILVER -- DEC FUTURE -- $1350.0
EXPECTED TRADING RANGE
GOLD DECEMBER   -- $726.70 -- $744.00				SILVER  DEC   -- $1320.0 - $1382.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER DEC   -- $348.40.00 - $366.70				NYMEX CRUDE OIL   - $78.20 - $83.20
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SILVER DECEMBER TECHNICAL LEVELS
SUPPORT				RESISTANCE
S1	S2	S3	S4	R1	R2	R3	R4
$1,305.00	$1,314.00	$1,330.00	$1,344.00	$1,374.00	$1,388.00	$1,406.00	$1,439.00
GENERAL MARKET CONDITIONS
Agflation or agri prices will be the key over the coming years. Wheat prices are at a record after Ukraine plans to limit wheat exports between November and March. More and more countries are importing wheat which has resulted in global inventory for wheat falling at a near twenty six year low. : The total area for cultivation is the same. One can sow either corn, soybean or wheat but not all three.  There is more value to sow corn and soybean than wheat due to use in alternate fuel. Once wheat start to rise, farmers will switch to wheat. Wheat needs huge soil moisture and chilly weather. Global warming will only reduce cause shortage of wheat over the next few years. The percentage of total expense on food will rise. Food price inflation will rise over the next few months which will test the central banks interest rate cutting measures.
Countries like India where the state intervenes to control prices of essential commodities will have to intervene more frequently to control prices. In 2007, the Indian government has been successful in checking food price rise. In India, government is very watchful over the price rise of agri commodities as in the past one of the state governments had lost due to sharp rise in onion prices.  The net effect central banks will have to choose between inflation and growth. Between 2004 and so far in 2007, central banks interest rate stance was known in advance which resulted in certainty. Days of certainty of central banks interest rate outlook are over. Gold will correct but will maintain the bullish outlook.
Three more trading sessions (including today) for the third quarter finish. Base metals were volatile. Lead and copper were the best performers while nickel and zinc were the laggards. Silver has disappointed so far in 2007. It should have outperformed all the metals. Silver, copper and crude oil have provided the safest investment for the low risk commodity investor. Gold and other base metals have been more volatile. Hopefully, silver, nickel and zinc will catch up in the final quarter.
Gold, in September has risen beyond our expectations. There could be further corrections before the next higher and a creation of another 2007 high. Spot gold has risen 14.29% so far while silver has just gained 3.57% in 2007. Copper is better off with 26.53% return so far in 2007. They have provided excellent returns considering the risk to return ratio which should rise in the final quarter of 2007.
There could be further correction in gold as the quarter comes to a close. Silver's technical picture is not very positive after reapeated failure to edge higher.
SILVER -- DECEMBER FUTURE
Silver needs to hold 200 day MA of $1348 to prevent further losses to $1312. On the higher side $1366 and $1388 are the initial resistance with $1440 as the key short term resistance.
NYMEX CRUDE OIL --  FUTURE
Crude oil targets $86 as long as it floats over $80.0. Key Support at 77.60
Happy Profitable Trading
Disclaimer : Any opinions as to the commentary, market information, and future direction of
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
party  in reliance upon the information provided in this material; or in any delays, inaccuracies,
errors in, or omissions of Information.

-- Posted Thursday, 27 September 2007 | Digg This Article

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