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-- Posted Tuesday, 27 September 2005 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:42 AM: GOLD -0.60, SILVER +0.50
London Gold Fix $465.65 +4.60 LME COPPER STOCKS 83,9250 metric -175 tns COMEX Gold stks 6.037 ml oz -611 COMEX SILVER stks 116.8 ml oz -44,689 oz OVERNIGHT ACTION: A firmer Dollar and weaker energy prices has pressured gold prices over night and may trigger some over due profit taking in the metal. GOLD: With energy prices taking a breather and the Dollar firmer off hawkish comments from Fed members, we would expect early weakness in December gold with profit taking possibly pressuring prices back to support between 462.30 and 460.00. However, given the uncertainty in the energy complex in regard to refining capacity and oil production, a down side correction in gold should be limited. Comments from two Fed members from Kansas City and Chicago indicated the Fed will continue on its rate tightening cycle to keep inflation at bay which boosted the Dollar over night and pressured the Euro. Gold's movements have been tied closely to the energy sector recently, but with energy prices soft over night, currency markets are also having an impact on gold this session. If profit taking in the energy sector takes hold, then Dec gold could also give back some sizable gains as the market remains vulnerable to profit taking with funds holding a huge net long position. However, with 5 refineries suffering major damage, 25% of US capacity still down as of Monday and all off shore oil production capacity in the Gulf of Mexico still shut, we would think any down side action in the energy complex would likely be short lived. Reduced refinery capacity just ahead of the winter fuel oil season will prevent a major turn in the energy complex and continue to be a catalyst for inflation. Therefore, a cleansing break in Dec gold back to the 460 area would be a buying opportunity. SILVER: December silver is holding steady in early trade, but if losses in gold and copper deepen, we would think silver will follow. However, given yesterday's wide trading range, we would not be surprised to see a sideways trade in silver with prices staying in a range between 7.415 and 7.235. Silver has been garnering support as both a precious metal and industrial metal and the market remains in a bullish technical formation to eventually test the 7.60 level or higher. METALS TECHNICAL OUTLOOK 9/27/2005 COMEX SILVER (DEC) 09/27/2005: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The market now above the 18-day moving average suggests the longer-term trend has turned up. The daily closing price reversal up on the daily chart is somewhat positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is 717.8. The next area of resistance is around 745.0 and 751.8, while 1st support hits today at 728.1 and below there at 717.8. COMEX GOLD (DEC) 09/27/2005: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The market now above the 18-day moving average suggests the longer-term trend has turned up. The upside closing price reversal on the daily chart is somewhat bullish. The close over the pivot swing is a somewhat positive setup. The next downside target is 459.8. The next area of resistance is around 473.6 and 476.1, while 1st support hits today at 465.4 and below there at 459.8.
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-- Posted Tuesday, 27 September 2005 | Digg This Article
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