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-- Posted Wednesday, 12 November 2003 | Digg This Article
METALS:11/12 OVERNIGHT CHANGE to 04:12 AM:GLD+0.00, SLV+1.30, PLAT+1.40 London A.M. Gold fix $388.05 +$1.65 LME COPPER STKS 503,575 tons -2,450 tons COMEX Gold stocks 2.96 ml Unchanged Comex Silver stocks 118.2 ml oz Unchanged OVERNIGHT ACTION: Very tight trading ranges but a minor bullish tilt remains in place. GOLD: We suspect that the Dollar is going to play catch up to the information released Tuesday and that should keep the Greenback under pressure and in turn provide some support to the gold market. Chinese gold prices were higher overnight and the London Fix also rose and that should put the US market in position to make a minor technical breakout above $389.3. A trade above $391.8 would also take the market above a critical point and that might attract a wave of fund buying. Apparently new safety laws for Truckers are due to be implemented and those news rules are supposedly going to increase the cost of shipping significantly. We are already seeing sky-high sea borne freight rates and those already high rates are expected to go even higher, with news from Singapore that terrorist might be planning to attack oil tankers (particularly finished product tankers). In our mind, there is certainly a basis for inflationary pressure off a "cost-push" perspective. In any regard, the terrorism threat against oil tankers simply increases flight to quality or anxiety and that should favor gold and indirectly silver. We must note that a mutual fund manager is predicting that improved economic growth will deflate the speculative interest in gold and that is partially verified by weakness in gold prices in the face of favorable economic numbers. We think the fund and small spec long position is 168,000 contracts coming into the action this morning but we now think that the net spec long could reach as high as 210,000 before one might consider it mostly tapped out. Seeing the net spec long rise to 210,000 might mean a rally of $42 and that would project a February target of $429. Buy February gold at market and buy a February gold 375 put for 850 points and sell a February gold 420 call for 700, that way corrections will not easily force players from position. SILVER: We are a little disappointed with the technical failure yesterday in the silver, as that could easily see the March silver slide back toward $4.95. If the gold market provides leadership we suspect that silver will avoid further selling and possibly attempt to return to the recent trading range of $5.09 to $5.23 in the March contract. Trend line support in the March contract comes in at $4.975, while top of the up trend channel comes in up at $5.316. In the end, silver is simply not tracking any fundamental issue consistently. METALS TECHNICAL OUTLOOK 11/12/03 #P-METALS 11/12/2003: SILVER (DEC): The market tilt is slightly negative with the close under the pivot. Initial support for silver is at 504.0 and below there at 501.2 with resistance likely at 507.3 and 509.5. A positive signal for trend short-term was given on a close over the 9-bar moving average. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 507.3. GOLD (DEC): Support for gold today comes in near 384.88, while resistance is pegged at 391.08. The crossover up in the daily stochastics is a bullish signal. The near-term upside target is at 391.08. The close over the pivot swing is a somewhat positive setup. The downside crossover of the 9 & 18 bar moving average is a negative signal.
-- Posted Wednesday, 12 November 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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