-- Posted Wednesday, 29 July 2009 | Digg This Article | | Source: GoldSeek.com

GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR

Yesterday I had mentioned that the rally in base metals and the weakness in the US dollar looked overstretched and I was right. Technically today’s closing is very important for all commodities and a lower close today will set the pace for another round of sell off. On the contrary a higher close will result in testing of new highs. The US dollar was once again the key mover for commodities.

The U.S. “must seriously consider” strict position limits on energy markets to curb speculation, Commodity Futures Trading Commission Chairman Gary Gensler said. These comments further added to the sell off in commodities. There will be a sea change in commodity trading over the coming years. Agro commodities and energies are essentials for every human being in the globe and their price rise can destabilize nations and well as politicians. An uininterrupted price rise is unwanted. They say that futures trading leads to price discovery. I have different view. Up to a  certain level of price rise futures trading  in commodities leads to price discovery but when speculation or investment demand which ever way one calls it takes charge then the rise in commodities will be deemed unjustified. Crude oil’s rise to $147 was not price discovery, it was speculation and hoarding. With global warming on the rise, the prices of agro commodities and energies are bound to rise but it is the pace of rise which global leaders, central bankers and exchange watchdogs have to decide among themselves.

TECHNICAL VIEW

COMEX GOLD AUGUST

100 day moving average at $926.50 is the initial support and a consolidated fall below $926.50 will result in $915.10 and $904. On the higher side $943.80 and $953.40 are the resistances.

COMEX SILVER SEPTEMBER

100 day moving average at $1357 is the initial support and a consolidated fall below the same will result in $1329 and $1290. On the higher side $1396-$1415 zone is the key resistance.

DISCLOSURE: NO POSITIONS

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

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