-- Posted Monday, 27 October 2008 | Digg This Article | Source: GoldSeek.com

GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR

Iceland, Hungary, Pakistan and Ukraine have all reached a deal with the IMF for some form of rescue package. UK may near recession. Global leaders (Including Asia) now want to take unified steps to stem the fall in stock markets and restore consumer confidence and business confidence. This reflects that the fundamentals of the global economy have been shaken. With every fall in stock markets the risk to return ratio will move in favor of the buyer for the long term investor. But one needs to be sector specific and stock specific even for long term investor. The lagging effects of the current fall in stock markets will be felt in 2009. 2009 will be a choppy year for global financial markets. Inflation will be lower in 2009 due to higher base effect, trickle down effects interest rates cuts and other measures taken now will be felt in 2009. Interest rate cuts will not there after the first quarter of 2009. Option investment is the best way to get over high volatilities in financial markets. Precious metals should outperform equities in 2009 also. Energies and base metals should form a medium term bottom in November.

This week we have the Federal Reserve meeting. An interest rate cut of half a percentage has been factored in by the markets. Next week we have the European central bank and the bank of England may cut interest rates and we also have the US October non farm payrolls and US presidential elections. The next two weeks are very crucial for all commodities. If they fail to rise there will be another round of selling and vice-versa.

NYMEX CRUDE OIL (1^ST CONTRACT)

Crude oil needs to hold $58-$60 zone this week to target $74 and $78 once again.

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 Monday, 27 October 2008 | Digg This Article | Source: GoldSeek.com

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