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-- Posted Thursday, 26 January 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +0.10, SILVER +5.00
London Gold Fix $562.25 Unch LME COPPER STOCKS 100,650 metric -850 tns COMEX Gold stks 7.217 ml oz +48,341 COMEX SILVER stks 123.4 ml oz +592,720 oz OVERNIGHT ACTION: Chinese gold prices were higher with international gold pricing holding most of the prior day's gains. GOLD: It was a little disappointing to see gold fail to rise to a new contract high yesterday in the wake of the strength in the Silver, platinum, copper and zinc markets. It is possible that the slight bounce in the Dollar yesterday took some of the zing out of the bull case in the gold. News reports overnight suggest that a new gold coin being sold in Japan might be set to ramp up investor/consumer interest in gold, and while some might balk at the rising price of gold, the buzz off persistent gains in gold prices is exactly the type of information that can fuel the speculative interest to even higher levels. In a similar sense, the fact that Gold Fields 2nd quarter profit nearly quadrupled from last year, should provide the market with some fresh bullish buzz and we have to think that more new highs in copper prices this morning, should lend the gold market some ongoing support. News overnight that Indian buyers recently stepped into gold on weakness, highlights the interest in the long side, but that story also reiterates some price sensitivity on the part of the consumer. However, with generally favorable world equity market action over the last several sessions, and a lot of talk about new commodity funds getting involved in the metals, we have to think that the trend in gold will continue to point to the upside. In fact, yesterday a major German bank announced that they would initiate a fund that concentrated on metals, energies and grains and that certainly helped gold facilitate the breakout above the $566 resistance zone. In the near term we would continue to see that $566 level as a critical pivot point, with close-in resistance seen at $570. SILVER: The silver market seems to be on a run and we suspect that part of the gains in silver are the result of fresh fund money deciding to diversify a little from the recent conclusive interest in gold. In fact, some buyers think that the relative historical price level of silver makes it more attractive than gold. In other words, with silver only managing an 19 year high yesterday, the argument can be made that silver is relatively cheaper than copper, which is at all time highs, or gold and platinum which at times have approached 22 to 25 year highs. Certainly the anticipation of a new Exchange Traded Fund in silver is supercharging speculative buying interest in silver, as that simply facilitates small investor involvement in silver. Near term critical support in silver comes in at $9.50 and our near term upside targeting in March silver is $9.60. METALS TECHNICAL OUTLOOK 1/26/2006 COMEX SILVER (MAR) 01/26/2006: The rally brought the market to a new contract high. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The cross over and close above the 18-day moving average indicates the longer-term trend has turned up. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next upside target is 966.4. The next area of resistance is around 960.3 and 966.4, while 1st support hits today at 941.8 and below there at 929.4. COMEX GOLD (FEB) 01/26/2006: 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 cross over and close above the 18-day moving average is an indication the longer-term trend has turned positive. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside objective is 553.7. The next area of resistance is around 566.9 and 571.3, while 1st support hits today at 558.1 and below there at 553.7.
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 Thursday, 26 January 2006 | Digg This Article
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