-- Posted Friday, 16 July 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
The big question for next week will be whether the euro/usd is able to maintain its current uptrend or not and whether it is able to break past 1.3100 in July or not. At the moment gains in the euro/usd are due to massive short covering and nothing else and the euro/usd needs to trade over 1.2750 for the whole of July to maintain the current uptrend. Euro and stock markets will affect gold in the short term to medium term. (A) If stock markets continue to rise then investor confidence will restored in equities and some of the short term and medium term flows which have moved into gold will move back to equities and cause a correction in gold prices. However if stock markets fall then a short term top will be formed and a ten percent correction from the highs is in the offing and gold prices will rise at least five percent from current levels. (B) If the euro/usd is able to maintain its current uptrend then some of the investment demand which has moved away from the eurozone due to sovereign debt default chances in Greece, Spain, Portugal and other eurozone member will move back into eurozone, there will be greater demand for treasuries in eurozone member nations and reduced inflows or may be even outlflows from gold and other safe havens. These two factors will dictate gold prices for the rest of the year apart from economic fundamentals.
For the time being economic numbers from China and India to the US and the Eurozone are showing signs of a mild slowdown but I do not foresee a double dip recession and will prefer to use sharp correction in base metals to invest for 2011. For the time being buying far dated call options in base metals are a better investment strategy than investing at the current prices.
US state elections are in November and at the moment it seems that Mr. Obama and his party might fare miserably in these elections. The US state elections are in November and before that I expect all US economic numbers to be window dressed to show a very rosy picture of the US economy. This will result in US stocks markets rising. I expect the Dow Jones to rise over 11000 in October but before that a pullback to 9800 and may be even 9200 could be there on economic fundamentals. So Monsoon rainfall has been good in crop sowing regions in India. Its middle of July but still crop sowing has started in a big way in central India and northern India. I expect the BSE Sensex to rise near 20000 before diwali on sound Indian economic fundamentals aided by global factors. But before that Sensex can correct to 16500-16800 as a part of the bull run.
Technically all commodities are bullish and can rise further. The key support to watch for today are:
Gold: $1207
Silver: $1815
Copper: $295
Crude Oil: $75.40
GOLD AUGUST TECHNICAL LEVELS |
SUPPORT | RESISTANCE |
S1 | S2 | S3 | S4 | R1 | R2 | R3 | R4 |
$1,186.00 | $1,196.00 | $1,202.00 | $1,209.00 | $1,219.00 | $1,225.75 | $1,229.00 | $1,242.00 |
SILVER SEPTEMBER 2010 TECHNICAL LEVELS |
SUPPORT | RESISTANCE |
S1 | S2 | S3 | S4 | R1 | R2 | R3 | R4 |
$1,748.00 | $1,769.00 | $1,788.00 | $1,816.00 | $1,840.00 | $1,870.00 | $1,888.00 | $1,932.00 |
COPPER SEPTEMBER 2010 TECHNICAL LEVELS |
` | RESISTANCE |
S1 | S2 | S3 | S4 | R1 | R2 | R3 | R4 |
$291.40 | $294.80 | $297.50 | $300.80 | $303.80 | $307.60 | $310.50 | $315.20 |
CRUDE OIL (1st Contract) |
SUPPORT | RESISTANCE |
S1 | S2 | S3 | S4 | R1 | R2 | R3 | R4 |
$73.00 | $74.26 | $75.24 | $76.30 | $77.60 | $78.40 | $79.70 | $81.20 |
COMEX TECHNICAL VIEW
COMEX GOLD AUGUST
Bullish over $1207 with $1225 and $1232 as price target
Bearish below $1202 with $1196 and $1186 as price target
Neutral Zone between $1202-$1207
The $1198-$1223 trading range will be broken soon and a new range will be formed. Use a buy on dips strategy as long as gold trades over $1196. A fresh wave of selling will be there only on a consolidated fall below $1196 or failure to break $1219-$1223 zone.
A close over $1210 today will result in $1245 and $1272 in short term.
COMEX SILVER SEPTEMBER
Bullish over $1815 with $1855 and $1910 as price target
Bearish below $1798 with 1769 and $1748 as price target
Neutral Zone between $1798-$1815
Silver now needs to break and trade over $1840-$1850 zone to target $1940
COMEX COPPER SEPTEMBER
Bullish over $297.40 with $307 and $317 as price target
Bearish below $294 with $289 and $284 as price target
Neutral Zone between: $289-$295
Copper now needs to float over $303 to be in bullish zone else it will fall to $295 and $289. We prefer to buy around $289 with stop loss below $286.
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $75.40 with $77.60 and $80.20 as price target
Bearish below $73.80 with $71.95 and $69.50 as price target.
Crude oil now needs to break $79-$79.50 today else it will fall back to $76 and $74.50.
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, 16 July 2010 | Digg This Article | Source: GoldSeek.com
