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-- Posted Tuesday, 23 November 2004 | Digg This Article
METALS: OVERNIGHT CHANGE to 3:45 AM:London Gold Fix $447.00 Unch LME COPPER STOCKS 62,350 metric tons -1,600 tons COMEX Gold stocks 5.357 ml Unchanged COMEX Silver stocks 102.8 ml Unchanged OVERNIGHT ACTION: A Japanese holiday thinned the trade in Asia in the overnight trade. GOLD: More minor declines were seen in the Pacific Rim region, but Chinese gold prices managed to make new highs, which would suggest that the Chinese continue to be a stalwart supporter of the bull track in gold. In fact, it is possible that all the talk about a floating Yuan is serving to foster alternative stores of value like gold in China. On the other hand, the Chinese optimism hasn't translated into a positive early US gold track, but with the Euro making a surge as we write this comment it is possible that the US gold track will improve into the pit opening. In the overnight dialogue we began to detect rumors of possible intervention by the BOJ, and that could at least temporarily alter the downward track in the Dollar and undermine gold. Therefore, the gold would appear to remain in the uptrend, but it also appears to stand at a critical crossroads. We continue to caution traders about the record, or near record small spec and fund long position, as failures of critical chart support could result in moderate levels of stop loss selling. With the expiration of the December options, there could certainly be some increased volatility around even numbered strike prices. While open interest is large and there is a large spec long and the spec long is carrying a net long options position of 51,000 contracts, we suspect that some traders will be content to take profits, while others will simply roll forward. However, because the locals generally use the futures to hedge themselves against options positions, the roll is facilitated. In the end, one can't rule out wider ranges today because of the expiration, especially if the market moves through a strike price right into the close, but the main overriding determinant of direct continues to be the Dollar.
SILVER: The silver is showing negative chart action with the high early this week causing prices to recoil and the pattern of lows showing almost upward momentum. The silver market also has a significant net spec long and could be considered even more vulnerable than gold, as gold is the primary market and silver is simply catching a ride from gold. Therefore, one might expect a break in gold to cause silver to give ground and possibly even out distance gold on the downside. The critical support level to watch today in the December silver is the $7.50 level, as a trade below that level could spark stop loss selling. METALS TECHNICAL OUTLOOK 11/23/04 SILVER (DEC): The daily stochastics have crossed over down which is a bearish indication. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The market's close above the 9-day moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is 751.3. The next area of resistance is around 761.0 and 766.2, while 1st support hits today at 753.5 and below there at 751.3. GOLD (DEC): The market rallied to a new contract high. Daily stochastics have risen into overbought territory, which will tend to support reversal action if it occurs. The market's short-term trend is positive on the close above the 9-day moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 451.3. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 450.5 and 451.3, while 1st support hits today at 447.5 and below there at 445.3. To those of you who have emailed or commented on the daily commentary regarding price manipulation: our daily comments are strictly to provide our customers and subscribers with news, which may influence the markets marginally on a day-to-day basis. This is not the forum to address price manipulation.
There are multitudes of ways in which one can participate in a bullish or bearish perspective in the metals complex. Mining shares as well as purchasing bullion are just a few. Another investment of choice is through futures and/ or options on futures contracts. If you have traded, then you will be able to appreciate the brokerage service that Nell Sloane and Group can offer. If you have not, and wish to learn more about it, please feel free to contact her staff so that they can forward you some educational literature for your review. Please contact Nell Sloane or a member of her team at 800 238 2610.
-- Posted Tuesday, 23 November 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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