-- Posted Friday, 5 August 2011 | | Disqus
Seems to me I was watching WWE’s royal rumble yesterday. Yesterday’s fall was waiting to happen. Just remember that whenever gold rises over $50 any week (from previous week close) correction will happen anytime and without any reason. Traders were chasing the momentum but sharp gains in the US dollar caused by currency intervention by the Swiss central bank and the bank of Japan and profit taking before US July non farm payrolls today caused the slide. In less than ninety minutes gold fell around $40 from the new all time high of $1683.50 and silver tumbled over five percent from $4229.50. The stock markets sell off resulted in liquidation of long position in commodities in order to meet margin requirement in stock markets. Base metals and energies are now tracking fundamentals and the current fall is good for global growth. I just hope crude oil prices remain below $90 for a sustained period.
I am an optimistic and would use the current fall in gold and silver to invest for the long term. Silver valuations look better than gold but volatility is expected to remain high. Gold’s pace of rise is unwarranted and purely momentum. Gold around $1620 till $1500 is a good long term investment.
DAILY TECHNICAL ANALYSIS |
Friday, August 05, 2011 |
| LTP | % CHG | 3 mth % | 12 mth % | 50 DAY MA | 100 DAY MA | 200 DAY MA |
| | | | | | | |
COMEX | | | | | | |
GOLD | 1650.5 | -0.42 | 7.46 | 42.53 | 1560.12 | 1518.66 | 1448.42 |
SILVER | 3934 | -0.23 | 2.70 | 123.19 | 3732.54 | 3817.10 | 3366.15 |
COPPER | 420.45 | -0.73 | 0.65 | 31.12 | 425.04 | 423.35 | 421.22 |
CRUDE OIL | 85.7 | -1.07 | -16.55 | 10.58 | 96.43 | 100.92 | 95.12 |
NAT GAS | 3.934 | -0.18 | -15.69 | -15.85 | 4.40 | 4.34 | 4.24 |
PLATINUM | 1716.8 | -0.73 | -6.39 | 11.72 | 1769.94 | 1776.46 | 1765.73 |
PALLADIUM | 745.5 | -0.99 | -4.29 | 59.79 | 782.57 | 766.11 | 759.84 |
| | | | | | | |
SPOT | | | | | | | |
GOLD | 1650.15 | 0.25 | 7.57 | 38.03 | 1559.07 | 1521.40 | 1450.60 |
SILVER | 39.28 | 1.89 | 2.03 | 114.41 | 37.21 | 38.30 | 33.95 |
TODAY
Stock markets will be the key and commodities are expected to follow stock markets. We expect short covering in equities and commodities as the week comes to close.
There is a lot of speculation of QE3 next week and today numbers can give us a hint. QE3 expectations by the Federal Reserve will result in traders either booking profit on long positions or go long on the weekend. Traders will not go short on the weekend.
TODAYS VIEW
Spot Gold: Spot gold failed to break $1690 yesterday and reached our target of $1648 yesterday. It now needs to trade over $1625 today to be in bullish zone and also close over $1625 today to be in bullish zone next week.
Spot Silver: Silver trade over $38.00 to be in bullish zone. A close below $38.00 today will be bearish for next week.
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 Friday, 5 August 2011 | Digg This Article
| Source: GoldSeek.com
