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-- Posted Wednesday, 19 February 2003 | Digg This Article
METALS:2/19 OVERNIGHT CHANGE to 4:22 AM:GLD+3.50 ,SLV-1.0,PLAT+0.20,CP +.40 London Gold Fix $347.20 +$.20 LME Copper Warehouse stks 826,225 ton -550 tns Comex Gold stocks 2.164 ml Unchanged COMEX Silver stks 107.6 ml oz -4,927 oz OVERNIGHT ACTION: Asian market weakness was reversed when the Japanese mkt reversed. GOLD: The liquidation pressure continues with the war timing put off into the future without specific dialogue on when a war might be expected. With the UK and US apparently working diplomatic channels for another UN “use of Force” resolution, the trade rightly assumes that an attack won't take place with negotiations ongoing. A number of key countries continue to pull embassy staff from Iraq, namely Russia, which is a bit of a surprise, considering how close the US has been dealing with Russia and how steadfast Russia seems to be against a war. While April gold did fail to hold critical support, by falling below the late December consolidation low, prices did reject that level somewhat in the after hours session Tuesday night and then recovered even more impressively into the Wednesday morning trade. Ashanti mines suggests that its Ghana mining operations is encountering difficult conditions of rising energy costs and declining production. However, the head of that company said those problems are common in the industry. In other words, it would not be surprising to see a continued pattern of lower world gold output, because of reduced exploration efforts and soaring energy costs. However, we doubt that the gold market will be driven higher by supply considerations, as the war issue had the market net spec long some 135,000 contracts around the highs recently and that spec long position probably remains 80,000 to 90,000 net long. In other words, war hype is driving prices not supply and demand considerations. While gold is firmer this morning, it should have heavy resistance around $350 and weak support at $342.5 basis the April contract. In order to light up the bull wave again, there has to be a more definitive date for a start to hostilities. Minor upward bias, but $350 needs to be regained to temper the bear camp. SILVER: Like gold, silver partially rejected the lows posted over the last four sessions. However, May silver would seem to have significant resistance around $4.60. If the world economy can maintain a positive bias, we see the recent lows as pretty cheap and possibly even deflated pricing. In fact, it would seem like the higher stock market benefited the silver yesterday, while gold was weak and that hints at a positive macro economic correlation for silver. We favor the long side but longs will have to risk May to at least $4.47 on a close basis. METALS TECHNICAL OUTLOOK 2/19/03 #P-METALS 2/19/03: SILVER (MAY): The market has a slightly positive tilt with the close over the swing pivot. Initial support for silver is at 452.1 and below there at 447.3 with resistance likely at 457.2 and 461.1. A negative signal for trend short-term was given on a close under the 9-bar moving average. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 447.3. GOLD (APR): Support for gold today comes in near 339.15, while resistance is pegged at 351.15. Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 339.15. The market setup is somewhat negative with the close under the 1st swing support. The close below the 9-day moving average is a negative short-term indicator for trend. Some caution in pressing the downside is warranted with the RSI under 30.
-- Posted Wednesday, 19 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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