-- Posted Wednesday, 13 October 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
It’s all about the US dollar and the Federal Reserve for commodities. The ability to hold over key supports suggests they can rise five percent hereon. Watch the US dollar carefully.
Leaders across the globe and central bank chiefs know that the current low interest rate regime will spur asset bubbles but it seems they are in no mood to take stops to prevent the same OR either I may call them helpless. The current risk taking if it continues till the first half of 2011 will definitely create an asset bubble which will be far greater than 2007. Central banks will not have the interest rate tool with them as and when the asset bubble burst. Central banks dependence on playing with money supply to spruce up the global economy will become a liability over the coming years. Japan is already experiencing the same as even near zero interest rate is doing nothing for its economy. The world will have more Japan over the coming years unless fundamental changes are done and changes which help the masses are put in place. The current global policy of the central bankers and politicians’ one widen income gap and income inequality which if it continues for a decade can result in social strife globally.
The fed
Federal Reserve policy makers last month were prepared to ease monetary policy “before long” and focused on purchases of Treasury securities and boosting inflation expectations as ways to add stimulus.
Policy makers “wanted to consider further the most effective framework for calibrating and communicating any additional steps to provide such stimulus. The report provides more clarity on the timing and components of potential easing actions without giving the amount of any additional asset purchases by the Fed. Since the meeting, weaker-than-forecast job growth in September and comments by policy makers, including New York Fed President William Dudley, have fueled speculation that the central bank will soon start a second wave of unconventional easing.
Our View: Be prepared for more US dollar depreciation, higher commodities prices and high volatility with every rise.
COMEX TECHNICAL VIEW
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $82.00 with $84.28 and $86.10 as price target
Bearish below $81.10 with $79.60 and $77.50 as price target.
As long as crude oil below $82 there is every possibility of $80.70 and $79.60.
MCX GOLD DECEMBER
Till Diwali gold can rise to INR 20250 and INR 20565 as long as it trades over INR 19200
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, 13 October 2010 | Digg This Article | Source: GoldSeek.com
