-- Posted Monday, 22 March 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
There is lack of major market moving economic news today. Japanese markets are closed today. The interest rate hike by the reserve bank of India has sparked fears that other emerging market nations could also follow India which could result in a reduction in global liquidity resulted in all the commodities falling on Friday. Food inflation is the key driver for emerging market central banks. The common man in India is still reeling under the massive cost of food price rises over the past year. His whole budget has been turned upside down. From the price of milk, sugar, vegetables and all food products have risen over twenty percent in the past one year. This has put a big dent on the savings of the common man. The big problem in India is that the agriculture minister continues to comment over the shortages in food and vegetables supply. This results in hoarding and a rise in prices. General elections are over and it seems that there is a political nexus between wholesale buyers and politicians in India. I do not think the small and medium sized farmer has benefited due to the large increased in food products. Wholesalers and other intermediaries are the biggest beneficiaries. There are still reports of farmers committing suicides every now and then. Recently a news channel showed a wheat crop rotting in the state of Punjab. Later the minister says that there is lack of storage space. This is the dumbest answer which one can hear from the minister. For the government of India its better to let crops rot than distribute it cheaply through the public distribution of India or create storage facilities. Why I am telling you all this when it has nothing to do metals and energy markets. The connections is that higher food prices will result in higher inflation and higher interest rates. With the advent of very high temperatures in March only India could be headed for another drought like situation. The net impact will be reduced physical demand of gold in India. However gold exchange traded funds investment demand will continue to rise.
It should be a technical trade today. We prefer to remain on the sidelines and watch.
TECHNICAL VIEW
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $80.53 with $82.80 and $85.20 as price target
Bearish below $79.50 with $78.20 and $76.20 as price target
Neutral Zone between $79.50 and $80.50
A sort of mini double top has been formed around $84 which suggests that crude oil can fall to $75 and $71 in the next two weeks if it does not break $84.
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, 22 March 2010 | Digg This Article | Source: GoldSeek.com
