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-- Posted Wednesday, 26 March 2003 | Digg This Article
METALS: OVERNIGHT CHANGE to 4:15 AM:GLD+1.40 ,SLV-0.3 ,PLAT+4.00 London Gold Fix $329.60 -$3.40 LME Copper Warehouse stks 819,525 ton -1,950 tns Comex Gold stocks 2.36 ml +26,603 oz COMEX Silver stks 108.1 ml oz -460,644 oz OVERNIGHT ACTION: Buying interest in Tokyo and Sydney lifted gold slightly overnight. GOLD: In our opinion the gold market hasn't completely reversed the downtrend pattern in effect since early February and certainly hasn't altered the aggressive liquidation tilt seen since the first of March. We suspect that the sand storm in Iraq stalled the timing of the assault of Baghdad and therefore the anxiety and flight to quality buying of gold on that event hasn't been totally interjected into prices. However, we suspect that the coming rally will run out of steam quickly and only after minimal price gains. It is possible that gold might rally aggressively if Iraq uses chemical weapons against the coalition forces. However, if Iraq uses chemical weapons that will instantly justify the war and that in turn could give the Dollar a massive boost and that might finish the war benefit toward gold. In other words, we would be more inclined to sell a rally to $341, than to buy a break to $327. In order to buy gold for a long-term value play, or for the hope that inflation might surface in a recovery we have to make sure that most of the war longs have been liquidated. While we may not get the chance we would be looking to buy June gold down in a range bound by $323-$325. Buying gold deep in the September through December consolidation range with a risk of $7 might give an investor a long look at the potential for inflation. Many think inflation is unlikely or impossible but considering the threat against insurers, rising security costs, very high energy prices and 45 year lows in interest rates all we are missing is a reason to see food prices rise and we would have a full slate of inflation factors. Look at a monthly PPI bar chart (of monthly changes) and inflation can't be ruled out. SILVER: SILVER: With the slight pause in fresh war developments and the tax cut proposal being cut down to almost nothing, we can understand the negative drag on silver prices from the macro economic situation. Unlike gold, silver is already much closer to long term fair value levels on the charts and may not have as much war liquidation to wade through. Therefore we are interested in picking up a long silver play around the $4.35 level in the May contract. METALS TECHNICAL OUTLOOK 3/26/03 SILVER (MAR): The market setup is supportive for early gains with the close over the 1st swing resistance. Initial support for silver is at 437.5 and below there at 434.2 with resistance likely at 441.4 and 444.0. 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 434.2. GOLD (APR): Support for gold today comes in near 324.00, while resistance is pegged at 336.40. 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 324.00. 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. The outside day down gives the market a bearish tilt. The daily closing price reversal down is a negative indicator for prices.
-- Posted Wednesday, 26 March 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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