-- Posted Tuesday, 20 September 2011 | | Disqus
Executive summary
- Obama unveils $3.6 trillion deficit plan
- S&P Cuts Italy Rating as Government Debt Mounts
- Geithner: Europe Will Follow ‘Lessons’ of U.S.
- Gold needs to trade over $1767 to be in bullish zone
- Silver needs to trade over $40.60 to be bullish zone
- Comex Copper key long term support is at $366
TODAY
Gold’s successive higher base is getting lower after failure to break past $1850 which suggests that gold can fall to $1752 and $1680 in short term very quickly. Anyways the movement after the Federal Reserve meeting is the key for gold as it set the trend for October. Silver looks bearish but needs to trade over $38.40 to be in medium term bullish zone. Copper and crude oil are bearish on lack of demand. LME copper can fall to $7250 if it trades below $7800 at any time of the day. One should buy gold on sharp dips before the Federal Reserve meetings statement.
US DEBT
Obama said his plan would pay down “the big pile of IOUs” amassed over the last decade with $2 in spending cuts for every $1 in new revenues. The program would allow the country to start reducing its debt level by 2017, the White House said. Under the White House plan, the national debt would fall to 73% of gross domestic product in 2012. If Congress took no action to cut spending, the debt would hit 90.7% of GDP, the White House said. The deficit would fall to 2.3% of GDP by 2021, the White House said. The White House said 90% of the savings from Medicare would come from reducing overpayments. The plan does not propose to raise the eligibility age for Medicare benefits.
Our view: This is an over optimistic plan which may not succeed. The results will take its own time and by that time the 2012 US presidential elections will be over and who knows the worlds may take see a new US president. Deficit reduction by cutting down on healthcare payments is bad for the American citizens where pharma companies and hospitals along with connivance of doctors loot everyone. There may be short term gains for the US dollar and long term pains will remain intact. Gold will be the sole survivor.
ITALIAN RATING CUT
Italy’s credit rating was cut by Standard & Poor’s on concern that weakening economic growth and a “fragile” government mean the nation won’t be able to reduce the euro-region’s second-largest debt burden. The rating was lowered to A from A+, with a negative outlook, S&P said in a statement. S&P said Italy’s net general government debt is the highest among A-rated sovereigns, and the company now expects it to peak later and at a higher level than it previously anticipated.
Our view: This has already been factored in by the markets and the euro has fallen. The credit rating cut is a little too late to have any effect on the euro and global financial markets.
GEITHNER: EUROPE WILL FOLLOW ‘LESSONS’ OF U.S.
U.S. Treasury Secretary Timothy F. Geithner predicted that Europe will adopt some of the same measures the U.S. took to battle the financial crisis that started in 2008. “I think you’re going to see them draw on the lessons of our crisis, draw on the lessons of things that worked here in the United States,” Geithner said in a Bloomberg Television interview today in Washington. “I think you’ll see that reflected in some of the choices they make.”
Our view: If Europe is to adopt the same measures as that of USA in 2008 then it implies Europe will print huge amounts of currencies and flood the market will free money. The effect of 2008 by USA has been a massive surge in gold prices and the creation of the world as a big gambling desk. If the Eurozone follows USA of 2008 then gold prices will rise to $3000 very quickly with high intra day volatility and the world will reach an unrecoverable recession along with hyper inflation. I do not think that European politicians are idiots to undertake such a short term move.
NYMEX CRUDE OIL (1ST CONTRACT)
Bearish below $87.60 with $85.50 and $82.50 as price target
Bullish over $88.10 with $92.50 and $95.20 as price target
Break point: $85.80
- $82.20 is the key support and crude oil needs to trade over $82.20 else it will crash to $75.00
- There will be sellers below $87.50
MCX CRUDE OIL
Bearish below 4110 with 4008 and 3876 as price target
Bullish over 4154 with 4201 and 4303 as price target
Neutral Zone: 4110-4154
BREAK POINT: 4009
- Back to square one as crude oil needs to trade over 4009 to target 4110-4254
- There will be sellers as long as crude oil trades below 4120
- Momentum call: Sell around 4100 stop loss over 4160 price target 4001-3954 or buy around 3920 stop loss below 3826 (btst call)
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
Happy profitable Trading
NOTES TO THE ABOVE REPORT
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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APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
COMEX GOLD – $15-$17
COMEX SILVER: $25-$30
COMEX COPPER: $3
NYMEX CRUDE OIL: $0.60
SPOT SILVER: $0.25
SPOT GOLD: $15-$17
-- Posted Tuesday, 20 September 2011 | Digg This Article
| Source: GoldSeek.com
