-- Posted Tuesday, 23 March 2010 | Digg This Article
| | Source: GoldSeek.com
DAILY COMEX REPORT
Technically gold and silver are not out of the woods yet and yesterday’s late rise was aided by a weaker US dollar and higher US stock markets. The Greek tragedy can result in short term higher investment demand for safe havens. A stronger US dollar may not affect commodities in a big way unless there is a technical breakdown or there is sharp reduction in global liquidity.
The Greek Fiasco
Europe’s stalemate over possible aid for debt-encumbered Greece deepened as European Central Bank President Jean-Claude Trichet spoke out against offering low- interest loans for which the Greek government has pressed.
Trichet’s demand for stringent terms and German Chancellor Angela Merkel’s push for sanctions against nations that breach deficit limits heightened the chance that Greece will leave a March 25-26 summit empty-handed. That could force Prime Minister George Papandreou to decide whether he’s ready to fulfill his threat and turn instead to the International Monetary Fund.
Our View: Over the past few years global central banks have increased their euro holdings and euro based investments as a part of their currency reserve diversification strategy. Now that euro as a currency is going through testing times. The Greece tragedy and fiscal imbalances in eurozone member nations is the first real test for euro since its formation. The big question is whether central banks will switch back to US dollar holdings or once again start reducing their euro holdings. My view is that central banks will prefer to wait and watch for the rest of the year before taking a final decision on their euro reserves. The problems with the eurozone does not get over with Greece getting timely aid. The real action begins after that as whether Greece and other eurozone members will be able to maintain sustained financial prudence after their bail outs. Each country have their own political compulsions and the big question is who rules? Politics or finance management. Global central banks are not one hundred percent independent. Unless there is concrete evidence of prudent fiscal management practices by members of the eurozone, the euro as a country will trade with an overall softer bias in the second quarter.
COMEX COPPER MAY
Bearish below $337.50 with $327.30 and $318.30 as price target
Bullish over $339.70 with $340.70 and $345.50 as price target
Neutral Zone between: $337.50 and $339.70
As long as copper trades over $329 downside risk will be limited.
MCX NATURAL GAS APRIL (SHORT TERM VIEW)
Fundamentally the most bearish among all the commodities it can fall to Rs.174.40 and Rs.152.20 in short term as long natural gas trades below Rs.200.20. Only a daily close over Rs.200.20 for three consecutive day will change the direction into bullish.
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
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-- Posted Tuesday, 23 March 2010 | Digg This Article | Source: GoldSeek.com
