-- Posted Tuesday, 9 November 2010 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
World Bank Chief Lifts Gold
Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank. Writing in the Financial Times, Robert Zoellick, the bank’s president since 2007, says a successor is needed to what he calls the “Bretton Woods II” system of floating currencies that has held since the Bretton Woods fixed exchange rate regime broke down in 1971. Mr Zoellick, a former US Treasury official, calls for a system that “is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account”. He adds: “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.” Wolfgang Schäuble, Germany’s finance minister, has raised the temperature by describing the US economic model as being in “deep crisis” and criticising the US Federal Reserve’s decision to pump an extra $600bn into financial markets. “It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank’s] printing press.”
Our View: Nothing Official about it. This is happening. Why are global central bankers increasing their gold holdings. They are not fools. Central banks portray a long term view of global economy and their increasing of gold reserves since 2007 is a reflection of the total breakdown in currency markets. Gold should rise to a minimum of $1700 by March 2011. We do not foresee gold falling below $1230 by March 2011 with every possibility of $1700 and $1900 by March 2011.
TODAY
Commodities have been delinked from the US dollar which suggests more gains to come. Momentum is very bullish and short positions are getting converted into long positions. Option related buying has also added to the bullish momentum in commodities.
COMEX TECHNICAL VIEW
COMEX GOLD DECEMBER
Bullish over $1396.0 with $1413 and $1434 as price target
Bearish below $1385.00 with $1367 and $1348 as price target
Neutral Zone between $1385-$1396
A break of $1413 will result in $1434 and $1463. On the lower side $1396 is the key support and fresh wave of selling will be there below $1413 only.
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $84.10 with $87.40 and $89.40 as price target
Bearish below $83.20 with $81.20 and $79.50 as price target.
Crude oil can now rise to $89-$91 as long as it trades over $84.
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 Tuesday, 9 November 2010 | Digg This Article | Source: GoldSeek.com
