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-- Posted Thursday, 28 October 2004 | Digg This Article
METALS: OVERNIGHT CHANGE to 3:45 AM:London Gold Fix $423.85 -$2.00 LME COPPER STOCKS 79,750 metric tons -400 tons COMEX Gold stocks 5.318 ml +3,183 oz COMEX Silver stocks 105.0 ml -45,296 oz OVERNIGHT ACTION: Slightly lower Asian gold market action mostly off lower oil prices. GOLD: While the Dollar isn't higher overnight, oil prices have declined and that keeps gold under a slight bit of pressure. Also adding significant pressure to gold prices this morning was a surprise Chinese interest rate hike. To add to the liquidative tone, Gold Fields posted a disappointing 1st quarter earnings report. In other words, both inside and outside factors are slightly negative for gold. The Commonwealth Bank of Australia is predicting that gold is set to peak and that prices will soften into 2005. The Australian Bank suggested that surging oil prices weren't as inflationary for gold as in the 70's and we would agree with that general statement but for different reasons. We have suggested for months that for gold prices to rise consistently, the market will have to see increasing physical tightness and improved demand. In other words, to see gold prices rise sharply above $440 we will probably need a strong global economy, which then might lead to inflation. In short, some entities are toning down their expectations for gold and while lower energy prices will initially deflate gold prices that might be the best thing for the bull camp in the long run. If you think that oil will continue to fall it is possible that gold could fall all the way down to $420.7 in the near term. SILVER: With gold under minor pressure and the macro economic view improving, it is possible that a short-term liquidation pattern settles into silver. Near term downside targeting is seen at $7.036 but the market might see some initial support coming in at $7.15. About the only positive for the metals markets today, is the fact that Spanish inflation readings for October were sharply higher as they rose 3.5% from the same time last year. Expect both small spec and fund selling unless something surprising unfolds in the energies, the Dollar and gold. METALS TECHNICAL OUTLOOK 10/28/2004 SILVER (DEC) 10/28/2004: A crossover down in the daily stochastics is a bearish signal. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near-term support is penetrated. The market's short-term trend is negative as the close remains below the 9-day moving average. The outside day down and close below the previous day's low is a negative signal. The close below the 1st swing support could weigh on the market. The next downside target is 698.0. Daily studies pointing down suggest selling minor rallies. The next area of resistance is around 734.0 and 753.0, while 1st support hits today at 706.5 and below there at 698.0. GOLD (DEC) 10/28/2004: A crossover down in the daily stochastics is a bearish signal. Momentum studies are trending lower from high levels, which should accelerate a move lower on a break below the 1st swing support. A positive signal for trend short-term was given on a close over the 9-bar moving average. The outside day down is somewhat negative. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is 420.5. The next area of resistance is around 428.5 and 432.2, while 1st support hits today at 422.7 and below there at 420.5.
-- Posted Thursday, 28 October 2004 | 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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