Metals and energies fell on a technical correction and nothing else. Yesterday I had mentioned that law of gravity can act anytime. After a one way rise for the past one month metals fell. Liquidity pressures due to continuous fall in stock markets entered commodity markets also.
I was comparing investment in equities and commodities. If even ten percent of money invested in equities moved into commodities, they will rise multiple times from current levels. In equities every country has an exchange which is the same in commodities also. However every exchange in a country has hundreds of companies listed in and there turnover is huge. Every country has at least two stock exchanges and it is difficult to count the total number of companies listed in all the stock exchanges of the world. The average daily turnover in all the global stock exchanges is multiple times more than commodities.
The performance of every company listed in any stock exchange will vary. Commodities are universal and unique with different varieties. Gold has one form, steel has different varieties, wheat has different qualities but the key ingredient is the same. Gold or wheat demand and supply is limited. The number of commodities globally is limited unlike the number of stocks which can be in the millions. So if stock markets continue to fall, the pace of rise of commodities will rise due to lack of alternate investments and continued rise in global liquidity on central bank interest rate cuts.
GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$930.0
Gold has to break $932 for $900 and $880. Resistance around $990 and $1006
NYMEX CRUDE OIL --FUTURE -- INTRA DAY PIVOT: $98.32
Falls below $98.50 then $96.50 and $92.80. Resistance $102.30
HAPPY PROFITABLE TRADING
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-- Posted Wednesday, 5 March 2008 | Digg This Article | Source: GoldSeek.com
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