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-- Posted Wednesday, 8 July 2009 | Digg This Article | | Source: GoldSeek.com

GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR

Speculation of a second stimulus package by the Obama administration resulted in base metals rising first and then fundamentals took over and they pared all their gains. Gold benefited as a result of safe haven demand. Crude oil continued its slide. Commodities continued to be affected by the US dollar and equities and in the absence of major market moving news this will continue for the rest of the week.

The flood of money into energy futures has raised concerns among regulators that investors are influencing the price of fuel. The Commodity Futures Trading Commission (CFTC) said that it may clamp down on oil and gas price speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds. My view is that every central bank and politician knows that over twenty five percent of commodity prices is mainly due to investment demand. The percentage varies with the global liquidity cycle and medium term fundamentals. Why did we have the amaranths, red kites among other firms which got busted due to a fall in commodity prices. The CFTC and all the central bankers should have made this move a few years back. Putting regulation on energies futures so that they move as per the whims and fancies of the regulatory authorities may alter the short term direction but in the medium term to long term all regulation will be useless.

In short, all the central bankers are trying to put excess regulation in every trade able financial instrument, be it equities, commodities, bonds or any other instrument. They believe that a combination of excess regulation and higher liquidity will put an end to all their economic woes. In the short term to medium term they may be right, but in the long term we will find yet another asset bubble which will be hard to control.

TECHNICAL VIEW

COMEX SILVER SEPTEMBER

Silver can fall to $1220 and $1136 in short term as long as it remains below $1375.

DISCLOSURE: NO POSITIONS

THIS IS JUST AND EXCERPT OF THE DAILY REPORT

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 Wednesday, 8 July 2009 | Digg This Article | Source: GoldSeek.com

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