-- Posted Friday, 2 July 2010 | Digg This Article
| | Source: GoldSeek.com
MCX JULY 2010-SEPTEMBER 2010 QUARTERLY REPORT
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
Sovereign debt defaults will continue to be in the mind of the investors. Greece and Eurozone will be closely watched. There are those who believe that euro will crash and fall below parity either before December 2010 or in the first half of 2011. I do not expect euro/usd to fall below parity in 2010. Eurozone economy is not of the woods yet and the European central bank, Germany and France in particular need to ensure that there is no further deterioration in Eurozone. If it happens then gold prices will zoom to $1350 and $1550 this quarter and silver over $2400 while stock markets, base metals and energies crashing. In short any further deterioration in Eurozone economy can lead to a total chaos in global economy and continued investment inflows in safe havens.
Interest rates at expected to remain unchanged in UK, Eurozone and Japan while there should be a 0.25% rise in emerging market economies like India this quarter.
If base metals, energies and stock markets continue to fall in the third quarter then a medium term bottom should be formed this quarter before the next big bull wave till March 2011. The only risk to my view is continued negative global economic fundamentals.
Gold and safe havens will continue to benefit from safe haven capital. Fiscal mess cannot be cleared overnight, it will take many months and quarters before positive results start to pour in. Till that time the overall bullish trend in safe havens will remain intact.
The hurricane season in the Gulf of Mexico will prevent traders and investors from going too short in crude oil. However crude oil needs to break $91 this quarter and in case it does not break $91 this quarter it can fall to $61 and $56.50 before the next bull run.
For Indian commodity prices US dollar – Indian Rupee (USD/INR) will be the key. Usd/Inr has been tracking global stock markets in the short term and has been very volatile. Monsoon rainfall and its distribution will be the key (apart from global factors). If monsoon fail and/or global stocks crash then usd/inr will weaken to 47.70 and 50.25 this quarter and then gain to 45.30 and 44.40. Keep a close watch at 46.10 all the time for direction.
MCX METALS AND ENERGY DAILY TECHNICAL ANALYSIS |
JULY 2010 TO SEPTEMBER 2010 QUARTER |
COMMODITY | CMP | | RESISTANCE |
| | S4 | S3 | S2 | S1 | R1 | R2 | R3 | R4 |
TECHNICAL LEVELS -- METALS |
GOLD | 18852 | 16562 | 17574 | 18211 | 18557 | 19338 | 19824 | 20476 | 22100 |
SILVER | 29607 | 25557 | 27520 | 28563 | 29075 | 30288 | 30970 | 31694 | 32883 |
COPPER | 305.8 | 248.70 | 262.75 | 280.20 | 291.70 | 305.50 | 317.80 | 323.00 | 339.40 |
ZINC | 83 | 64.20 | 71.00 | 77.00 | 80.30 | 86.40 | 89.00 | 95.00 | 106.20 |
LEAD | 82.5 | 58.55 | 71.69 | 76.00 | 81.30 | 83.90 | 89.10 | 92.70 | 104.00 |
NICKEL | 920.2 | 528.40 | 719.60 | 740.00 | 832.00 | 984 | 1049 | 1120 | 1321 |
TECHNICAL LEVELS -- ENERGIES |
CRUDE OIL | 3523 | 2747 | 3187 | 3355 | 3436 | 3568 | 3691 | 3859 | 3988 |
NATURAL GAS | 214 | 144.3 | 172.1 | 193 | 207 | 220.9 | 234.9 | 255.5 | 283.7 |
TECNICAL VIEW
GOLD
Bullish over 17574 with 19493, 20476 and 22100 as price target.
Bearish below 17180 with 16562 and 15604 as price target
Neutral zone: 18170-17574
Despite the bullish trend gold needs to break and trade over 19493 in the month of July for further gains to 20476. However if gold does not break 19493 then it will fall to 18211 and 17574 before the next bull wave to 22894.
Gold 12 month forecast
Over the next twelve months gold should rise to a minimum of 22100 and maximum of 26937 as long as it trades over 16562.
Gold Diwali price forecast
If gold continues to rise in July to September quarter OR does not fall below 17500 then I expect gold prices to fall this Diwali to 16562. What I mean to say is that if gold prices continue to rise in the third quarter then gold prices will be in a short term bear phase in the fourth quarter.
If Gold fall in July to September period but trades over 17500 then gold prices should rise to 20859 this Diwali.
Bearish trend will emerge under the following circumstances
1) Gold has a daily close below 18211 for a week then it will fall to 17500 and 16450 before the next wave higher.
2) Failure to break 20134 in July to September quarter will result in a correction to 17574 and 16216.
When to invest in gold
One can invest in gold around 17500 in small amounts and aggressively around 16500 till 15500 for a period of eighteen months.
Short term investors can invest around 18200 till 17500 with a strict stop loss below 17100
(All gold prices are price/10 grams)
SILVER
Bullish over 26887 with 32883 and 36159 as price target
Bearish below 26113 with 25157 and 23055 as price target
Neutral Zone between:26113-26887
Silver will be very volatile in the third quarter as it gets caught between short term bulls and medium term bears. The key to silver prices are (A) Base metals prices (B) Precious metals prices. If and only if both of them rise simultaneously then silver prices will rise at a very rapid pace. However if either of them fall then silver prices will fall first then consolidate and then another big bull wave.
Just remember that silver falls at double the pace of gold and also rises at double the pace of gold. Under valuation in silver continues so far in 2010 also.
Silver 5 year to 7 years forecast
I have always been a silver bull since I started analyzing silver and will continue to remain a silver bull. In the next 5 years to 7 years silver will rise to a minimum of 50522 and maximum of 75000-1,00,000 per kilogram. There can be corrections to 23055 and 19705 if bear trend starts but I will not be worried as it will give me another investment opportunity.
Silver 12 month forecast
In the next twelve months silver will rise to 36159 and 38658 as long as it trades over 25557 (on weekly closing basis)
Silver Diwali price forecast
Silver prices should rise to 31694 and 33653 by Diwali. However the gold rider is also applicable in silver also which is if silver continues to rise between July and September then it will be in a bear phase in the last quarter.
Bearish trend will emerge under the following circumstances
1) Failure to break 30970 in July to September quarter will result in a fall to 26887 and 25157 before the next wave higher.
2) Silver trades below 28925 for a week.
When to invest in silver
The ideal price to invest for a long term investor is between 25000-26500. I am not sure if silver prices will fall to 25000 before Diwali. But I am against investing in silver at the current price of 29500 for long term (eighteen months)
Short term investors invest between 28000-28500 with a strict stop loss below 27520
(All silver are prices are price/kilogram)
COPPER
Bullish over 262.75 with 323 and 344 as price target
Bearish below 248 with191 and 177 as price target
Neutral zone between 248-262.75
Copper is caught between short term bears and long term bulls. In the short term copper is bearish as long as it trades below 321. Copper has been unable to trade over 321 in May and June and can fall to 280.20 and 264 before the next wave higher.
If copper continues to fall in July to September period then I expect it to form a medium term bottom and a very big rise in the last quarter of 2010.
For a medium term bullish trend copper needs to trade over 248 and 262. We prefer investing in copper around these prices for the medium term.
In the short term as long as copper trades over 280.20 it will rise to 317.80 and 334.10
CRUDE OIL
Bullish over 3187 with 3609 and 3898 as price target
Bearish below 2990 with 2747 and 2394 as price target
Neutral Zone between 2990-3187
I am a very bullish on crude oil in the long term. However in July to September quarter if crude oil does not break 3730-3809 zone then it will fall to 3187 and below before the next bull wave.
In the very short term crude oil needs to trade over 3487 to be in bullish zone and rise to 3691 and 3859. If crude oil trades below 3487 then it will fall to 3355 and 3187.
In the next six months crude oil needs to break and trade over 3988 else it will fall to 2736.
ZINC
Bearish below 80.45 with 77.00, 64.20 and 46.25 as price target
Bullish over 86.45 with 95 and 119.75 as price target
Neutral Zone between 80.45-86.45
Zinc needs to trade over 86.45 for seven consecutive days to be in a bullish zone and rise to 119.75.
If zinc does not trade over 86.45 for seven consecutive days then it can fall to 77 and 64.20 before the next wave higher.
LEAD
Bearish below 81.90 with 70.10 and 58.55 as price target
Bullish over 89.10 with 97.90 and 114.90 as price target
Neutral Zone between:81.90-89.10
Lead needs to trade over 89.10 for seven consecutive days to be in a bullish zone and rise to 97.90 and 114.40
If lead does not trade over 89.10 for seven consecutive days then it can fall to 70.10 and 64.90 before the next wave higher.
NICKEL
Bullish over 812 with 984, 1048 and 1312 as price target
Bearish below 790 with 719 and 615 as price target
Neutral Zone between 790-812
Nickel needs to trade over 812 or break 1120 for direction. As long as nickel does not break 812-1120 zone it will consolidate in this range before the next direction.
There is a technical congestion between 670-730 zone which suggest that as long as nickel trades over 670-730 range for the rest of 2010 it will rise to 1120 and 1312
NATURAL GAS
Bullish over 207 with 248.80 and 283.70 as price target
Bearish below 193 with 179.20 and 144.30 as price target
Over the past twelve months natural gas failed to break 290 and it remains to be seen if is able to break 290 before december.
In the short term natural gas needs to trade over 207 else it will fall to 193 and 172 before the next wave higher. One should invest in far dated futures on any dips below 190 with a stop loss of around 137.
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 Friday, 2 July 2010 | Digg This Article | Source: GoldSeek.com
