-- Posted Monday, 18 April 2011 | | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
This is an Easter week and traders will continue to use a buy on dips strategy in gold and silver before they leave for mini Easter vacations. Further option expiry next Monday should result in gold and silver rising till expiry. China has raised it bank reserve rate requirement and expectations are that this will be followed by interest rate hike over the coming weeks and months. Over the past one year whenever china has raised interest rates all commodities have risen sharply.
The other day I was watching “CNBC Awaaz” channel and there was a programme on stock price manipulation of initial public offering (IPO”s) by Mr.Tulsian. It was an eye opener for me as a lot of IPO shares over the past one year are more than fifty percent below their issue price. In the early nineties there was the controller of capital issues in India. Under it there was a large number of vanishing companies such as MS Shoes, Mesco group, damania airways, JVG group etc. Investors were duped huge amounts in the nineties. Security and exchange board of India (SEBI) was formed after the failure of controller of capital issues in India. It makes me now believe that SEBI is powerless and/or there is connivance with IPO issuers. The retail investor has still not understood any lessons from the past and the lure for fast money get him duped.
I ask these IPO investors to invest in gold and silver. Even at the current prices of Rs.21700 (gold) and Rs.63400 (silver), gold and silver will not fall fifty percent over the coming years. If you invest in stock just for a loss then its better to buy physical gold and silver or invest in exchange traded funds. However one should invest for the long term (two years to three years). Short term investors wait for a correction and then invest. Silver has risen more than thirty percent so far this year and a correction can come anytime. It’s difficult to predict when that correction will come. In the past we have seen crude oil rising from $60 to $147 between 2006 and 2008 and thereafter a big fall to around $33. When crude oil rose to $147 most of the retail traders were caught invested and incurred huge losses. The same will happen with silver but difficult to predict the top and trend reversal.
Momentum bullish technically oversold conditions exist in silver. Gold, copper and crude oil still have room for further gains.
COMEX TECHNICAL VIEW
COMEX GOLD JUNE
Bullish over $1477 with $1497 and $1508 as price target
Bearish below $1472 with $1461 and $1449 as price target
Neutral Zone between $1472-$1477
- Gold can rise to $1497 and $1505 as long as it trades over $1477
- There will be sellers only below $1477 only
- Trading call: Buy around $1480 till $1460 stop loss below $1449 target $1508 and $1525
COMEX SILVER MAY
Bullish over $4257 with $4424 and $4514 as price target
Bearish below $4220 with $4137 and $4048 price target
Neutral Zone between: $4220 and $4257
- $4287 price target achieved. Silver can rise to $4429 as long as it trades over $4200
- There will be sellers as long as silver trades below $4200
- Trading call: Buy over $4336 for $4385 and $4485 OR sell below $4290 for $4254 and $4100
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 Monday, 18 April 2011 | Digg This Article
| Source: GoldSeek.com
