-- Posted Tuesday, 2 April 2013 | | Disqus
Manufacturing numbers in the US have been below market expectation suggesting the continuation of a firm trend in gold and silver. Base metals will rise when value based physical buying comes up. Copper and zinc are looking attractive at the moment for medium term investing. However I will prefer to wait and watch the next two days before making my investment move in copper and zinc. Silver is yet another long term opportunity to invest. In case silver trades below $2756 next Monday then it can fall to $2450 and $2126. The next five trading sessions are very crucial for silver. I will rather prefer to use next five days dip in silver to invest for year end. One can also buy silver December call options with a strike price of over $37.00
Does central bank buying imply that the gold prices should rise?
I have been asked this question over and over for the past three months and gold prices have fallen. Central banks are buying gold to preserve the value of their nation assets against devaluation in currency prices. After 2004 the theme among central bankers were to increase euro reserves and reduce US dollar reserves. This changed in 2010 when Greece and other eurozone nations problems occurred and euro/usd fell from the high of 1.50 to 1.22 effecting a reduction in the net purchasing power of central banks foreign exchange reserves. Central banks faced a dilemma on US dollar reserves or euro reserves and in the end came to the conclusion that the more gold you have in your kitty the better it is off in the long term. Investors have followed central banks for most of the time but are worried now as gold prices are trading with a softer bias. Our View: Central banks are buying gold for the long term which is a period of five years to fifteen years. Most of us invest for a period of one year to three years and worry when at the end of the day the value of our investment falls by more than ten percent. In my view twenty percent of one’s portfolio should be for long term. Of the twenty percent long term investment one should invest in half in physical gold and silver. Rest in bonds and selected stocks. Futures invest is risky and I am against futures investment in gold and silver. Do not follow the central bank blindly. However I am a long term gold bull and will remain a long term gold run and will rather use the current 2013 and 2014 dips in gold and silver to invest for the next five years.
COMEX TECHNICAL VIEW
COMEX GOLD JUNE 2013 – current price $1603.40
Bullish over $1601.00 with $1613.20 and $1626.00 price target
Bearish below $1596.00 with $1588.20 and $1573.60 as price target
Neutral Zone between $1596.00-$1601.00
Break point: $1596.00
- Gold can rise to $1611-$1625 since it has managed to trade over $1590
- There will be sellers only below $1590
MCX GOLD JUNE – PRICES IN INDIAN RUPEES BELOW
Today Gold needs to trade over 30041 to target 30147-30270. Key weekly support is at 29824 and as long as gold trades over 29824 downside risks will be limited.
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 Manan Somani
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 Tuesday, 2 April 2013 | Digg This Article
| Source: GoldSeek.com
