-- Posted Friday, 19 September 2008 | Digg This Article
| Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
Volatility has been very high in gold. Silver and other metals and energies volatility is high but not exceptional. Low risk traders should stay away from the markets and let things settle down. The storm has come, traders are waiting for more storms in the aftermath. There is a coordinated effort by all the central banks to cool down the financial storm. The financial storm is over. Once the dust setlles down volatilty in metals market will fall. The effort by central banks has resulted in spot gold falling from $802.50 to $846.80. The US dollar has gained marginally. This is the weekend and traders will be hesitant to go long at higher prices in metals and energies.
Premiums in gold bars have turned into discount in New Delhi. On Wednesday the premium was Rs.150 per ten grams while yesterday the discount was Rs.100 per ten grams.
US HOUSE PASSES ANTI OIL-SPECULATION BILL
The U.S. House of Representatives passed a bill intended to prevent excessive speculation in oil and other futures trading despite a White House veto threat
The bill would:
--require foreign exchanges to adopt reporting standards and position limits similar to U.S. rules.
--require CFTC to set position limits on major energy and commodity contracts.
--add 100 people to the CFTC enforcement staff.
--revise CFTC reports to list activity by swaps dealers in a separate category.
--set stricter conditions for exempting hedgers from position limits.
--require routine reporting on over-the-counter trading of look-alike oil and agricultural contracts; CFTC can set position limits if necessary to prevent market disruptions.
Our view: The bill if passed will prevent wild swings in commodity futures markets. The rise in commodities prices only due to speculation will hurt the common man and voters which can have far reaching consequences in a democratic globe.
INDIAN RUPEE UPDATE
RBI intervention is the key for the rupee. In the short term if the rupee fails to break 47.22 it will fall to 45.80 and 45.20. Inflation was at 12.14% for the week ended September, 6. The rupee will start to gain once inflation starts to fall and liquidity conditons improve. From October liquidity will rise as Indian companies close their half yearly books of accounts. We remain positive in the medium on the rupee and prefer selling far dated futures despite crash in premiums.
COMEX SILVER DECEMBER
$1220 is the pivot. Silver needs to hold $1220 to be in a bullish zone and target $1330 and $1410. If silver does not hold $1220 then it will fall back once again to $1140 and $1040.
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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 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. Nothing in this article is, or should be construed as, investment advice.Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Friday, 19 September 2008 | Digg This Article | Source: GoldSeek.com
