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-- Posted Monday, 19 December 2005 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +6.00, SILVER +8.00
London Gold Fix $507.45 +4.95 LME COPPER STOCKS 75,575 metric +500 tns COMEX Gold stks 6.675 ml oz -679 oz COMEX SILVER stks 117.5 ml oz -5,060 oz OVERNIGHT ACTION: European and Asian investors rekindled their interest in gold overnight. GOLD: It would seem like the bull camp has come back alive in gold after a 4 day washout move of $50 and with the international markets seeing increased retail interest, we suspect that the overnight strength will have a shelf life. However, the gold market remains moderately overbought in the spec category, with the December 13th Commitment of Traders with Options report showing the Gold Non-Commercial position net long 158,884 contracts and the Non-reportable position net long 26,316 contracts. On the other hand, the February gold comes into the action this morning roughly $14 below the level where the COT report was measured and that means the spec long position is probably closer to 160,000 contracts. Since the gold market didn't seem to benefit from the slide in the Dollar last week, it is probably unimportant to gold this morning that the Dollar has seemingly found decent support on the charts. In order to turn the technicals positive in the US market today, February gold will have to climb and hold above the $512.5 level. In fact, to make a believer out of the US trade, February gold might have to manage a close very near to the day's highs, as the last two sessions, the gold market hasn't been able to retain a large portion of the early bounce into the close. A firmer start this morning, in the face of higher oil prices and a positively biased equity market might be the best fundamental equation for gold, and with the only outside market negative coming from some early weakness in copper prices the bias is indeed pointing upward. Near term critical support in February gold today comes in at $508.5, with a critical failure taking place with a decline below $503.6. Near term resistance in February gold is seen at $513.8. SILVER: A nice base of support in March silver at $8.51 could help the market avoid a repeat of last week's sell off. In fact, with the gold market providing solid leadership this morning we would not be surprised to see March silver climb above the critical $8.75 level. However, the December 13th Commitment of Traders with Options report showed the Silver Non-Commercial position net long 60,185 contracts, with the Non-reportable position net long 19,474 contracts and that leaves the market significantly overbought and possibly vulnerable to more profit taking. In other words, it will be important for the bull camp to maintain control over prices today, as that could shift the balance of power away from the bears. Unfortunately the copper market is a little choppy today and that could hint at less than stellar physical demand expectations for silver. From a chart perspective, the March silver should remain in a strong position as long as prices manage to hold above the critical pivot point support of $8.52. METALS TECHNICAL OUTLOOK 12/19/2005 COMEX SILVER (MAR) 12/19/2005: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The major trend has turned down with the cross over back below the 18-day moving average. The market could take on a defensive posture with the daily closing price reversal down. The market tilt is slightly negative with the close under the pivot. The next downside objective is 845.7. The next area of resistance is around 868.3 and 878.6, while 1st support hits today at 851.8 and below there at 845.7. COMEX GOLD (FEB) 12/19/2005: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close below the 18-day moving average is an indication the longer-term trend has turned down. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 500.7. The next area of resistance is around 508.9 and 512.7, while 1st support hits today at 502.9 and below there at 500.7.
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-- Posted Monday, 19 December 2005 | 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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