-- Posted Monday, 5 November 2012 | | Disqus
General market conditions
The US presidential election is there tomorrow and on Thursday we have the bank of England meeting and the European central bank meeting. The market perception is that a reelection of Barack Obama will result in gold and silver zooming from next year while a Mitt Romney win can result in short term bearish trend in gold and silver. Momentum is certainly bearish for gold and silver.
There is concern that US economic numbers of October could have been manipulated by the current president Barack Obama to ensure a rosy picture of the US economy which may not last. The real picture of the US economy will be known only by April 2013. The sandy hurricane effect will be there from November 2012 to March 2013. Thereafter normalcy will return.
I am of the belief that if the global economy is showing signs of stabilization and growth then base metals, energies and silver should rise. The current fall in base metals, energies and silver will not be sustainable in the long run. We prefer to use the current dip in base metals, energies and silver to buy far dated futures and far dated options.
Those who are looking to buy gold for marriages and investment should use this week to make their purchases. Do not wait till Dhanteras or Diwali to buy. The Rupee will be the key for Indian commodity prices.
WHICH IS THE SAFEST COMMODITY TO TRADE IN MCX?
The answer is simple “copper”. Ever since MCX started in India in October 2003, copper is the safest commodity and least risky commodity to trade in MCX. Copper price movement is fundamental first and technical later. If the global economic outlook looks bad then copper prices will be the first to fall and if the global economic outlook is good then copper prices are the first to rise. One needs to take a look at a global economic view for a minimum period of three months to decide on copper fundamentals. There are very few days in a year in which copper prices have a big 20-25 rupees intra day price movement. Most of the times copper trades in a range and gives break out signals much earlier than other commodity groups. Even intra day stop losses are less likely to be hit than gold, silver or other base metals and energies.
TRADING BEFORE DIWALI – some trading tips on how to trade.
Every one likes to make an extra buck before diwali and other festivals. The best way is to indulge in speculative activities in commodities and equities and take more risk than you would have taken at any time during the year. This is human nature. But always think of losses and fix the amount of loss beyond which you will not trade before any festival and Diwali. I have seen families ruined by trading losses before Diwali and other festivals due to trading. Just remember that festivals are a time to celebrate with the family whether with less money or more money it will not matter much. The precious time will never come back. The past will haunt us all our lives in case we incur huge trading losses before Diwali or any other festival. Have a very “Happy Diwali”
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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
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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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.
APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS 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
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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-- Posted Monday, 5 November 2012 | Digg This Article
| Source: GoldSeek.com
