Asian Metals Market Update for 9th September, 2008
By: Chintan Karnani, Insignia Consultants
-- Posted Tuesday, 9 September 2008 | Digg This Article | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
Silver, copper and crude oil have fallen while gold remains firm.Silver has been caught between gold and base metals. Lower global growth for the rest of 2008 will reduce demand for base metals. This has reduced investment interest. The base in base metal prices over the past one year tells the extent of investment interest that commodities have. Nickel. Zinc and lead have fallen more than fifty percent from their 2007 highs while silver has fallen around fifty percent from its 2008 highs set in March, 2008. This clearly suggests that markets have ignored fundamentals and are driven by investment interest. Once global liquidity increases all these battered metals will find renewed investment demand. We prefer to buy June 2009 and beyond call options in all base metals. Global growth should rise sharply in 2009 specially in the second half of 2009 which may result in supply shortages. Steel prices should trade with a firm bias for the rest of the year and 2009. Any softening in steel prices will increase demand.
The nationalization of Freddie Mac and Fannie may be short term positive for the US dollar but in the medium to long term it will be US dollar negative. Now bankrupt companies in the US know that the Federal Reserve is there to protect them. The Federal Reserve can do anything as it has a money making machine. In the long term this will only result in the decline of paper assets and a rise in the value of hard assets.
COMEX GOLD DECEMBER
Intra day gold has to break n hold $824-$826 zone $834-$844 zone. Failure to do so will result in a fall to $786.50. Fresh sellers will emerge only on a consolidated fall below $785.
Disclaimer:Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employeeshave 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.Nothing in this article is, or should be construed as, investment advice.Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Tuesday, 9 September 2008 | Digg This Article | Source: GoldSeek.com
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