-- Posted Thursday, 30 September 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
I must admit the third quarter has been one of the best quarters for financial markets as stocks and commodities all rose in tandem. There has been a general rise in investor risk appetite as interest rates are expected to be stable and money supply remained high with chances of an even increase in money supply. Plus the US state elections in November resulted in the Obama government pushing for voter friendly measures. It seems markets have forgotten the Gulf of Mexico oil spill quickly but I hope US voters affected by the oil spill have not and will punish the culprits with their voting power. This was a bit on the third quarter.
Key factors to look out for in the fourth quarter:
1) Interest rates: Any signs of an interest rate hike and/or reduction in liquidity by major global central bankers before March 2011 will result in stock markets and commodity markets falling in tandem. This will become clear after mid November.
2) Europe: Sovereign debt default, checking fiscal imbalances and ensuring that the measures are implemented apart from growth will be the key for Europe. Any negative news from this part of earth will result in gold zooming to $1600+ and currencies falling like a pack of cards once again.
3) Global economy: The Global economy needs to maintain the current growth rates for stock markets, base metals and energies to rise. Any fundamental changes will result in all of them crashing in the short term.
4) China: China is the big daddy of base metals. China is trying to cool its housing market. Any slowdown in the Chinese economy will result in base metals and energies crashing. I expect the Chinese yuan to be revalued before the US state elections just to capture votes. Former US president George W. Bush had also resorted to such a move and I expect the Obama government to copy his predecessor. Chinese revaluation of the yuan and/or any increase in Chinese interest rates will result in a temporary correction in base metals, silver and energies which will be nothing but an investment demand.
5) Geopolitical risk: At the moment there is no geopolitical risk but any major spike in the same whether from Iran or Korean peninsula or Indian sub continent or Afghanistan or any other region will support.
Just remember that it will not be a one way traffic in commodities and stocks in the fourth quarter. After mid November traders and investors will be taking positions for the first quarter of 2011.
INTRA DAY
The US dollar and stock markets will dictate commodities. Technically over brought conditions exist and there can be a correction any time.
COMEX TECHNICAL VIEW
COMEX SILVER DECEMBER
Bullish over $2145 with $2210 and $2252 as price target
Bearish below $2100 with $2088 and $1940 as price target
Neutral Zone between$2100-$2145
Silver now needs to break and trade over $2210 for further gains. On the lower side fresh wave of selling will be there below $2145 only.
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $76.30 with $78.20 and $79.60 as price target
Bearish below $75.60 with $74.20 and $71.49 as price target.
Crude oil needs to trade over $76.30 for $80.20 and $82.70.
MCX GOLD DECEMBER
In the October as long as INR 18800 holds gold will target INR 19800 and INR 20250
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 Thursday, 30 September 2010 | Digg This Article | Source: GoldSeek.com
