-- Posted Monday, 1 February 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
In the coming week commodity investors will have to contend with fears of sovereign defaults and the potential for unpleasant surprises in the U.S. labor market. There are a lot of concerns going on as far as the sovereign debt is concerned in a lot of the nations, specifically in the euro zone.
US Economic Numbers This Week
A heavy week for economic data will culminate in Friday's non-farm payrolls report. Analysts believe the economy added 5,000 jobs in January, according to a Reuters poll. Another negative surprise after the previous month's unexpected surge in job losses could roil markets. There will be an early indication of the sustainability of growth when the Institute for Supply Management releases its manufacturing report for January. Economists in a Reuters poll are expecting a reading of 55.2, showing an expanding sector for the sixth straight month. That will be followed by the ISM's service sector survey on Wednesday, expected to edge into growth mode after the largest segment of the U.S. economy struggled to find its footing in the fourth quarter of last year.
ETC
The adage 'as January goes, so goes the year' bodes ill for commodity investors. Technically the current fall in all commodities is very healthy and a part and parcel of a long term uptrend in all commodities. One needs to keep in mind that in the longer term supply side pressures will exist in all commodities. But we are all concerned over the pace of rise of commodities which had defied fundamentals in the last nine months of 2009. Fundamentals have caught up with investors and so the correction in all commodities.
This weekend's closing will be very important particularly as to how long the US dollar continues to gain and how long stock markets continue to fall. I am a bit skeptical on whether the US dollar will be able to hold on to the current bullish sentiment. The US economy is not out of the woods and that recovery in my view is just cyclical. I would rather prefer to buy some US dollar far dated put options if there is any five percent gain in February.
A lower close on Friday in precious metals, base metals and energies will result medium term downtrend in them. Technically all metals and energies are in a oversold condition which suggest that there should be a rise before the next move. One needs to watch if they are able to break and hold key resistances and failure to do the same this week will result in ten percent to fifteen percent fall in February.
Chinese traders and investors could be out of the market till mid February due to the Chinese new year of Tiger on Valentine day or 14th February 2010. The situation will change once the Chinese enter the markets.
TECHNICAL VIEW
COMEX GOLD APRIL
Bearish below $1086 with $1073 and $1046 as price target
Bullish over $1089 with $1095 and $1107 as price target
Neutral Zone between $1068-$1066.00
Support: $1067.80-$1057.90-$1049.90-$1044.30
Resistance: $1089.20-$1099.80-$1107.10
Triple bottom around $1070 suggest that as long as gold trades over $1070 it will rise to $1107 in short term.
Fresh wave of selling will be there below $1068 all the way to $1046.
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
For further clarifications on this report call 91-9312335649 (Mr. Chintan Karnani)
Yahoo chat: chintan342@yahoo.co.in
You can also mail your queries at chintan@insigniaindia.com
-- Posted Monday, 1 February 2010 | Digg This Article | Source: GoldSeek.com
