-- Posted Wednesday, 30 March 2011 | | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
COPPER
This turnaround in copper prices demonstrates just how fast the cycles in commodity product pricing can move. China’s demand for refined copper fell 12.5% in the past months and sentiment is being affected by that nation’s newly developed trade deficit. China is not a slam dunk for 10% growth this year or next. That impacts copper demand and prices. “Downside risks to copper prices are emerging” warns Standard Bank in a note picked up by some financial blogs.
Get this! Some 40% of all the net refined copper China needs is being held in bonded warehouses according to Standard Bank, which has a major banking operation in China. It is being used “to provide cheap working capital for other businesses” because banks treat it as good as gold in holding its value.
A scandal, if accurate. Property developers have amassed the copper reserves and use them as collateral for their real estate speculation because they are unable to get financing from the banking community due to government restrictions on lending for real estate speculation.
As Standard Bank bluntly puts it; this “fiddle” has the effect of exposing China to falling copper prices and falling real estate prices– a real double whammy.
(Please note that the above note was sent to me by one of my friends. I do not know how accurate they are. Insignia Consultants has no intention to harm anyone or defame any one. If anyone incurs losses due to the above note and/or is hurt, then please excuse us.)
Effect on copper: As and when this comes up copper prices will crash like a pack of cards. We all know that investment demand makes up fifty percent of all commodities. So in the long term any reduction of investment demand will be bearish for copper and other commodities.
TODAY
Trade in the technical on lack of major market moving news.
COMEX TECHNICAL VIEW
COMEX GOLD APRIL
Bullish over $1424 with $1431and $1447 as price target
Bearish below $1419 with $1411 and $1396 as price target
Neutral Zone between $1419-$1424
- A mini double bottom has been formed around $1411 which suggests that gold can rise to $1424 and $1441 as long as it trades over $1411. There will be a technical breakdown below $1411 all the way to $1386.
- Trading call: Buy over $1419 for $1424 and $1431 OR Sell below $1411 for $1408 and $1403
NYMEX CRUDE OIL (1ST CONTRACT)
Bullish over $103.10 with $106.40 and $109.60 as price target
Bearish below $102.40 with $100.50 and $98.40 as price target.
Crude oil needs to trade over $104 for the whole day to target $106 and $107. Crude oil can fall to $100.50 and $98 as long as it trades below $104.
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.
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-- Posted Wednesday, 30 March 2011 | Digg This Article
| Source: GoldSeek.com
