-- Posted Friday, 18 June 2010 | Digg This Article
| | Source: GoldSeek.com
The key theme this week for financial markets was Europe and its problems and nothing else. Centrals are also concerned whether Eurozone crisis will affect their economies and by how much. As result the ultra loose monetary policy continues and there is no sight of liquidity reduction measures in the short term. Lack of alternate sources of investment along with very high global liquidity has resulted in gold continuing to rise week after week and that the summer correction of gold prices has not happened.
Base metals found sellers on rise on lower Chinese demand and lack of investment demand. Base metals should form a medium term bottom in the three weeks to four weeks and thereafter test the current year’s highs soon. I am on the bull side as far as base metals are concerned and despite the current weakness and technical bearishness base metals fundamentals should change as a weaker Euro lifts exports from eurozone. But the pace of rise of base metals will be very slow.
This weeks Federal Reserve meeting should be a damn squib. That’s all I can say. They are not going to raise interest rates and/or give announcements of a major reduction in liquidity. Positive views on US economy will be there. Option expiry along with silver and copper July future expiry nearing will add to volatility.
When will gold fall? This is the big question that I am being asked.
There is lack of major negative news at the moment as far as gold is concerned. Traders and investors are more obsessed with gold for the time being. Gold’s rise is the case of too much money chasing too few investments.
1) Failure to break $1310 by end June can result in a fall to $1225 and $1196. For me even if gold falls to $1186 and $1124 they will be nothing but a correction of a part and parcel of a bull rally.
2) Four successive of lower close can result in gold falling by $125 and $187 from the highs.
3) Three successive weeks of lower close can result in a medium term bear phase.
4) Three successive months of lower closing will result in a medium term to long bear phase (depending upon other factors)
5) Sharp reduction in global liquidity. (This is highly unlikely in 2010).
Will silver catch up gold and rise to a new historical high?
This is the question which I am asking myself on and on. Silver is no more a poor mans gold and will rise further but it will take a bit of time and with very high two way movement. For silver to rise precious metals and base metals should rise simultaneously and/or there is a technical breakout on the higher side.
1) Silver needs to break and trade over $1960 for over a week to target $2099 and $2361. As long as this does not happen the pace of rise of silver will be very slow in the short term
2) Silver continues to trade over $1700 for the next two months.
COMEX TECHNICAL VIEW
COMEX GOLD AUGUST
There will be a technical congestion between $1263 and $1274 and gold needs to break the same convincingly for $1317 and $1346. A short term top will be formed only if gold closes (daily) below $1248 for three consecutive days.
COMEX SILVER JULY
Silver needs to trade over $1890 and/or break $2010 to be in bullish zone. There will be a technical breakdown if both these conditions are not met in totality.
COMEX COPPER JULY
Copper needs to trade over $289 to be in a weekly bullish zone and target 303 and $326. There could be clash between short term bears and medium term bulls.
Key short term resistance: $303 and $314.60
Key medium term support: $289 $246.75
NYMEX CRUDE OIL (1ST CONTRACT)
Crude oil now targets 2010 high of $87.10 by next week as long as it trades over $72.50. Intra day $78.60 is the key price to watch for. However failure to break and trade over $80.50 this week will result in a correction to $72 and $67 once again.
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.
Customer care: 9811139549/9311139549
You can also mail your queries at chintan@insigniaindia.com
-- Posted Friday, 18 June 2010 | Digg This Article | Source: GoldSeek.com
