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-- Posted Tuesday, 4 February 2003 | Digg This Article
METALS:2/4 OVERNIGHT CHANGE to 4:15 AM:GLD+4.60 ,SLV+4.0 ,PLAT+8.10, CP +20 London Gold Fix $374.85 +$5.85 LME Copper Warehouse stks 830,425 ton -2,800 tons Comex Gold stocks 2.159 ml +16,352 oz COMEX Silver stks 107.6 ml oz +533,473 oz
OVERNIGHT ACTION: Australian & Japanese traders bid gold to yet another new high.
GOLD: Apparently the gold market isn't going to wait for the actual testimony to the UN on Wednesday, to bid gold up in anticipation of a war. Overnight Japanese buyers were evidently chasing gold because new leadership at the BOJ didn't give off an air of confidence and because many Japanese think the currency action will prompt even more buying interest in gold. We suspect that another wave of war longs is in the process of entering the market. Considering the last 6 months price action, we predict that every $10 in gold gains, could result in another 10,000 spec longs entering the fray. In other words, we now assume that the net spec long position in gold is 135,000 contracts, which is getting closer to our topping target of 150,000 spec longs and a nearby gold price of $390 to $415. The big thing to watch for in the coming sessions is whether or not France and Germany change their opinion toward Iraq as that could initially lift gold but in the end could give a quicker resolution to the conflict. With a 6-year high in gold overnight, we suspect that some recent short interest is being stopped out. Until the monthly gold chart sees prices in the $380 to $410 area, the market probably hasn't even reached its upcoming trading range. While the Dollar is weaker today, the primary driving force for the bulls is the war track. Critical support in April gold comes in at $369.
SILVER: Thus far, the silver market hasn't responded to the overnight rise in gold but we have to think that May will at least regain the top of the up trend channel at $5.08. By not reacting to the reduced silver production story from Mexico Monday, the silver market proved that it is not tracking pure supply and demand fundamentals closely. If silver doesn't climb away from critical support of $4.82 in the wake of the gold gains a number of spec longs might decide to bail out of positions. In order to reach mid channel the May silver has to rise to $4.95. METALS TECHNICAL OUTLOOK 2/4/03
#P-METALS 02/04/03: SILVER (MAR): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 480.3 and below there at 477.4 with resistance likely at 484.5 and 486.8. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 477.4.
GOLD (APR): Support for gold today comes in near 368.35, while resistance is pegged at 374.35. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The next downside objective is now at 368.35. With the close over the 1st swing resistance number, the market is in a moderately positive position. The market's short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels.
-- Posted Tuesday, 4 February 2003 | Digg This Article
***This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. This report should not be construed as a request to engage in any transaction involving the purchase or sale of a futures contract and/or commodity option thereon. The risk of loss in trading futures contracts or commodity options can be substantial, and investors should carefully consider the inherent risks of such an investment in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of Hartfield Management, Inc. is strictly prohibited.
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