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-- Posted Monday, 10 February 2003 | Digg This Article
METALS:2/10 OVERNIGHT CHANGE to 4:15 AM:GLD+1.90 ,SLV+1.5 ,PLAT+2.40 London Gold Fix $371.75 +$1.20 LME Copper Warehouse sts 844,375 ton +475 tns Comex Gold stocks 2.146 ml -104 oz COMEX Silver stks 107.5 ml oz +1,099,401 oz OVERNIGHT ACTION: Very light buying in Asia signals a tempering of recent selling. GOLD: The market seems to have found some support around $370. However, with the COT report registering a 140,000 contract long last Tuesday, the market is significantly overbought. Furthermore it would seem as if the US is fighting an uphill battle in getting the UN to agree to an attack of Iraq. Apparently France, Germany and Russia want more time for the inspectors and unless the US releases more damaging intelligence, or the inspectors find a smoking gun, an attack will be delayed, or the US will see a massive political cost of a unilateral attack. In fact, there are reports that some countries might ask for a UN Peace keeping force to be put into Baghdad, which in a sense could serve as a barrier to a US attack. In other words, we are not sure that gold longs can expect to get the type of news necessary, to push gold back above the recent highs. In fact, gold might have to be a little concerned about deflationary pressures, which may be given credence by more significant losses in the US stock market. Trend line support in the April gold comes in at $368.3, however, we would not rule out a return to $366.5, in the coming week, especially if diplomatic maneuvering manages to put up a near term barrier to an attack. SILVER: The net spec long in silver was 78,000 long last Tuesday, but silver has corrected since that report was measured and that could mean a slightly less overbought condition. However, silver remains historically long and vulnerable. In fact, we would fear that silver is even more vulnerable to deflationary type selling than is gold. We would not rule out a decline to $4.635 basis the May contract, especially if gold provides no leadership. For the near term, the war buzz is put on hold and some longs will exit rather than hold for up to a week without a major diplomatic change. In fact with attitudes so negative toward the economy and the stock market, we suspect that silver will see consistent pressure and could slide to $450, under the right combination of bearish issues. METALS TECHNICAL OUTLOOK 2/10/03 #P-METALS 02/10/03: SILVER (MAY): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 461.2 and below there at 457.9 with resistance likely at 468.9 and 471.2. The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 457.9. GOLD (APR): Support for gold today comes in near 363.55, while resistance is pegged at 378.75. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 363.55. The market's close below the pivot swing number is a mildly negative setup. The market's short-term trend is negative as the close remains below the 9-day moving average.
-- Posted Monday, 10 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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