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-- Posted Wednesday, 26 February 2003 | Digg This Article
METALS:2/26 OVERNIGHT CHANGE to 4:15 AM:GLD+1.00 ,SLV+0.3,PLAT-1.10,CP +105 London Gold Fix $352.55 -$7.55 LME Copper Warehouse stks 823,175 ton -425 tns Comex Gold stocks 2.263 ml Unchanged COMEX Silver stks 108.0 ml oz Unchanged OVERNIGHT ACTION: Asian gold higher as North Korea asked citizens to prepare for war. GOLD: The gold market failed to hold most of the gains Tuesday, partly because of the delay in the Turkish base deal and partly because talk of last weeks European Central Bank gold sales surfaced. The Central Bank sales were apparently part of the normal sales pattern agreed to in the Washington accord, but seeing 30 tons of gold come onto the market alerts the large spec long position to the realities of supply and demand. We also have to think that the US President somewhat left the door open for diplomacy, as he suggested that Iraq can still avoid war if it fully disarms. With moonless skies seen this weekend and the 2nd UN resolution having almost no chance of passing, the gold market thought the President might say “that time had run out on Iraq”. In any regard, an escalation in tensions on the Korean peninsula, combines with comments from Saddam to leave gold in a positive posture. Saddam evidently discounted exile rumors by telling his people they will fight and die in their country. We suspect that the $350 level is support in the April contract and that the market will have a tendency to migrate toward $360. Given the highly charged political relationships around the world, it would seem very difficult to defeat the war track and that in turn means it will be difficult to defeat the bull pattern in gold. Be long but carry some put coverage. The hope for a BOE rate cut would seem to countervail some of the negative deflation talk being thrown off by war fears. SILVER: The action in silver this week is very disappointing but considering the background noise of deflation and the partially choppy action in gold, silver can hardly be expected to perform impressively. In order for silver to climb above the $4.75 level in the May contract, it will have to see April gold make a bid to trade above $355. Fresh longs in silver probably have to risk positions to at least $4.59. Keep in mind the silver market is a secondary market that is apparently getting its direction almost exclusively from gold and physical demand is simply not strong enough to be a daily factor in pricing. METALS TECHNICAL OUTLOOK 2/26/03 #P-METALS 2/26/03: SILVER (MAY): The close below the 1st swing support could weigh on the market. Initial support for silver is at 459.9 and below there at 455.2 with resistance likely at 467.8 and 471.4. A positive signal for trend short-term was given on a close over the 9-bar moving average. Stochastics are at mid-range, but trending higher which should reinforce a move higher if resistance levels are taken out. The next upside objective is 467.8. GOLD (APR): Support for gold today comes in near 345.40, while resistance is pegged at 362.20. Stochastics are rising from over sold levels which is bullish and should support higher prices. The near-term upside target is at 362.20. The market setup is somewhat negative with the close under the 1st swing support. The close above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal down is a negative indicator for prices.
-- Posted Wednesday, 26 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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