-- Posted Wednesday, 10 March 2010 | Digg This Article
| | Source: GoldSeek.com
Is it okay to blame speculation for reduction in global growth?
Greek Prime Minister George Papandreou will press U.S. President Barack Obama to help Europe combat “unprincipled speculators,” who he said have roiled financial markets and threaten a new global financial crisis.
“Europe and America must say ‘enough is enough’ to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system,” he said in a speech yesterday in Washington.
Papandreou, who is struggling to convince investors his government is serious about taming Europe’s biggest budget deficit, meets Obama and Treasury Secretary Timothy F. Geithner today in his first U.S. visit since being elected in October.
“If the European crisis metastasizes, it could create a new global financial crisis with implications as grave as the U.S.-originated crisis two years ago,” Papandreou said.
There have been a lot of other comments on speculators taking the global economy to ransom in the past and this debate will continue governments to allow equity trading and commodity trading. When the Asian crisis happened and speculators ransomed some of the East Asian countries no one cribbled but now since the same happened with a eurozone the west has started making noises. Where were they when the Asian crisis happened?
Our View: Central banks and governments are themselves to blame for excess speculation and not the hedge funds and individual traders. First they reduce interest rates to near zero and flush the markets with unlimited free money and later expect the holders of the money to stop speculation. There is a cost of holding free money. Lack of alternate investments (other than speculation) has always resulted in greater speculative investments. Either the central banks create alternate speculation free investment areas or face the music of speculation. I do not think regulation will reduce flows into speculative instruments in the long term as there will be ways to means to avoid the regulation. Reducing money supply and higher interest rates is the key to reduce speculation in commodities and currency.
INTRA DAY TRADING STRATEGY
The first phase of a technical correction in gold, silver, copper and crude oil is over and further losses will be there only on a sustained fall below key technical supports. The next three days are very crucial for all commodities.
COMEX TECHNICAL VIEW
COMEX GOLD APRIL
Bullish over $1111 with $1128 and $1137 as price target
Bearish below $1104 with $1096 and $1083 as price target
Neutral Zone between $1104-$1111
Support: $1110 and $1088
Resistance: $1131 and $1141.30
If gold remains below $1110 for three hours in US session then it will fall to $1096 and $1082
We prefer to buy only on a consolidated break of $1127 for $1131 and $1137
MCX GOLD APRIL
As long as Rs.16480 holds downside risk will be limited in short term and gold will target Rs.16960 and Rs.17160. There will be a technical breakdown whenever gold closes below Rs.16480 for two consecutive days in short term to Rs.15867 and below.
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
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
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-- Posted Wednesday, 10 March 2010 | Digg This Article | Source: GoldSeek.com
