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-- Posted Tuesday, 11 February 2003 | Digg This Article
METALS:2/11 OVERNIGHT CHANGE to 4:15 AM:GLD-1.80 ,SLV+0.0 ,PLAT-0.90 London Gold Fix $362.15 -$9.60 LME Copper Warehouse sts 838,375 ton -6,000 tns Comex Gold stocks 2.156 ml +9,805 oz COMEX Silver stks 107.5 ml oz -34,471 oz OVERNIGHT ACTION: Minor buying seen after a massive downside adjustment late Monday. GOLD: As we suspected the pause in the buildup to war, caused another wave of long liquidation. While we doubt that the gold market is finished with the war track, we have to think that the near term track could continue to be negative. It goes without saying that the record historical net spec long was vulnerable, considering the 140,000 spec long reading posted as of last Tuesday. We also have to think that the Dollar will continue to rise in sync with the slightly improved economic attitude being fostered by the US numbers and the Fed. In fact, a key Fed member Monday suggested that he expected the US economy to grow at a 3% expansion pace in 2003. Furthermore, the Fed Chairman is also expected to talk positively about the US economy's ability to recover. In other words, the war threat has reduced flight to quality buying in gold and the outlook for the economy has improved enough to tone down flight to quality buying off macro economic concerns. Rightly or wrongly, the war is delayed and that leaves gold under pressure. Near term support in the April gold comes in at $360 but we doubt that gold prices will slide to $350, unless the US stock market soars and the market appears to be convinced that the US economy is set to recover. Those that bought June gold 360 puts might consider selling March gold $360 puts for 6.00 or more, looking to take some profits on the recent decline (if you don't understand this move call 312-786-4450 for an explanation) and hoping to capitalize on steep time decay in the March options. SILVER: As we suggested yesterday, the silver market was very vulnerable partly because of the toned down war threat and partly because of the extensively overbought condition of silver. Near term support is seen at $4.56 and then again at $4.50 basis the May contract. If the US economy manages to recover the silver market should be able to find long-term support relatively soon but the liquidation of the war long could temporarily push prices below, what might eventually be determined fair value. The war threat isn't passed but it might not be back at the same anxiety level when it is ultimately solved. METALS TECHNICAL OUTLOOK 2/11/03 #P-METALS 02/11/03: SILVER (MAY): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 456.0 and below there at 452.7 with resistance likely at 464.3 and 466.5. The market's close below the 9-day moving average is an indication the short-term trend remains negative. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 452.7. GOLD (APR): Support for gold today comes in near 356.73, while resistance is pegged at 375.73. 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 356.73. Daily studies pointing down suggests selling minor rallies. The market's close below the 1st swing support number suggests a moderately negative setup for today. The market's short-term trend is negative as the close remains below the 9-day moving average.
-- Posted Tuesday, 11 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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