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-- Posted Wednesday, 21 December 2005 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +0.10, SILVER -2.50
London Gold Fix $504.50 -11.45 LME COPPER STOCKS 80,600 metric +3,550 tns COMEX Gold stks 6.557 ml oz -117,910 oz COMEX SILVER stks 117.5 ml oz Unchanged OVERNIGHT ACTION: International spot gold tracked lower possibly off fresh selling. GOLD: The gold market was confronted with a double negative on Tuesday and was eventually unable to remain positive into the close. With another inflation reading discounting the need for flight to quality buying and the US Dollar mounting an impressive explosion on the upside, it is not surprising that the selling pressure resurfaced. We also think that weakness in equity and oil prices fostered the selling interest in gold, as that action prompted another group of gold longs to move to the sidelines. It would seem like the lower European and Asian action overnight is fresh selling, instead of simple catch up selling with recent US declines and for that reason we suspect that February gold might be on track to test $490 today. In fact, with the US stock market mostly back on its heels and the holiday season robbing the market of some physical metals activity, we have to assume that the path of least resistance is pointing downward. Certainly there are some value hunting buyers waiting in the wings, but in the near term it would seem like prices will be able to drift lower. Near term critical support in February gold comes in today at $494.3, $492 and eventually at $490. In order to turn off the ongoing selling tilt, the February gold will have to manage a trade and close above $500. SILVER: With the negative tilt being thrown off by gold and the new low for the move overnight in March silver, we have to think that the bear camp retains control. In fact, with very little support on the charts until $825, we would expect to see a weak close today. Over the last couple of weeks the metals markets have been unable to extend early buying interest in the second half of the trading session and without the markets showing strength in the early portion of the trade, it is possible that the selling intensifies later today. We suspect that the sagging macro economic view and the holiday atmosphere is adding to the liquidative tone in the market. Even the copper market is failing to provide positive leadership for silver and that certainly gives the bear camp a near term edge. Unless the March silver manages a trade and close back above $841 we will assume that the near term track in prices is pointing downward. METALS TECHNICAL OUTLOOK 12/21/2005 COMEX SILVER (MAR) 12/21/2005: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The close under the 18-day moving average indicates the longer-term trend could be turning down. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is 813.3. The next area of resistance is around 855.5 and 877.3, while 1st support hits today at 823.5 and below there at 813.3. COMEX GOLD (FEB) 12/21/2005: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The close under the 18-day moving average indicates the longer-term trend could be turning down. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is 487.3. The next area of resistance is around 503.4 and 512.8, while 1st support hits today at 490.6 and below there at 487.3.
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-- Posted Wednesday, 21 December 2005 | Digg This Article
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