-- Posted Wednesday, 15 September 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
The consolidation phase in gold is over as it yet again creates a new high and nears $1300. For me $1300 is nothing but a psychological level with $1500 as the ultimate price target. Low interest rates along very high liquidity levels will result in a continued rise in gold and other safe havens. The top is yet to be formed and is far away. Short sellers use higher stop losses or hedge against options. I will prefer to do a bull spread under the prevailing market conditions in all conditions.
ASSET BUBBLES WLL BE FORMED SOON
The chain is as below
Very slow economic growth à Near zero interest rates & high money supply à Prevents economy from breaking down and starts the process of growth à But central banks delay raising interest rates for a longer duration than they should do and also increase money supply on the slightest hint of a slowdown in growth or money supply à Excess money means too much money chasing too few goods à This trend has the tendency to create asset bubbles if it continues for a long duration à under the current global circumstance this trend is being repeated and the asset bubbles which is being created will be hard to prick. Further whenever this asset bubble gets pricked it will be greater than 2007-2008 period and that unified actions by all the central bankers will not give desired results.
The world is nearing an asset bubble. There will be asset bubbles in China also. Whether the asset bubble will be formed in 2011 or by 2014 remains to be seen. But I see a big asset bubble being formed by 2014 and also the same will get pricked by 2014 unless central bankers start prevention measures in 2011. Just remember that just by eating too much one cannot get fat if there are other ailments. The global central banks digestive system is weak. They will soon digest the venom of their spleen. The spleen is the current asset bubble forming policies.
TODAY
Japan has intervened in the currency markets today for the first time after 2004. It remains to be seen as to whether they are successful. If the yen weakens substantially then gold and other safe havens will fall. Technically over bought conditions exist and a correction can happen anytime. But we need some fundamental news for the sell off.
COMEX TECHNICAL VIEW
COMEX SILVER DECEMBER
Bullish over $2010 with $2065 and $2116 as price target
Bearish below $1995 with 1955 and $1925 as price target
Neutral Zone between $1995-$2010
$2050 price target achieved. Silver can fall $100-$150 anytime if there are any selling news before the next wave higher to $2400.
COMEX COPPER DECEMBER
Bullish over $346.00 with $357 and $361 as price target
Bearish below $339 with $335.00 and $329.00 as price target
Neutral Zone between: $339-$346
A consolidated break of $347 will result in $352-$358.
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 Wednesday, 15 September 2010 | Digg This Article | Source: GoldSeek.com
