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-- Posted Monday, 30 January 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +1.70, SILVER +6.50
London Gold Fix $560.40 +.55 LME COPPER STOCKS 97,725 metric -1,600 tns COMEX Gold stks 7.318 ml oz +192 oz COMEX SILVER stks 124.7 ml oz +598,139 oz OVERNIGHT ACTION: Narrow trading ranges overnight with a minor upward bias. GOLD: The gold market appears to be coiling and with the rest of the metals showing impressive upside action of late, we can understand at least a part of the bull camp becoming a little concerned. However, as can we seen in the latest COT figures, the gold market actually reduced its net spec long in the last week by 8,700 contracts, with the combined spec and fund long coming in at 177,000 contracts. With the Chinese on an extended holiday this week, we suspect that the overnight action in the metals understates the potential volatility that might be seen in the US session today. It is certainly possible that the gold market will see some fresh flight to quality interest off the rising tensions in the Middle East but with the Dollar also showing significant strength last week, it is possible that Dollar strength ends up countervailing any flight to quality interest that might be seen in gold. While the broad market isn't willing to accept the thought yet, we think that the Treasury market is beginning to factor in an inflationary potential for 2006 that should be a factor that serves to keep existing investors in long gold positions. In the near term, it is possible that silver continues to lead the precious metals complex and that gold begrudgingly follows at a slower rate of gain. Hopefully traders continued to hold a long April gold futures from $551 and are short 2 March gold $600 calls for 450 (the second time we are short from 450) as we think that the rate of climb in gold is going to slow significantly into the March options expiration. Critical near term support in April gold is $559 and resistance is seen at $572. SILVER: The silver market looks to outperform gold in the near term and part of that leadership may be the result of a strong Dollar holding back gold. The January 24th Commitment of Traders with Options report showed the Silver Non-Commercial position to be net long 56,366 contracts with the Non-reportable position net long 21,964 contracts for a combined spec long position of 78,000 contracts. While that positioning hints at an overbought condition, it should be noted that the net spec long in silver did decline by roughly 2,200 contracts in the latest week. Near term critical support in March silver is seen at $9.55, with the next upside target seen up at $9.85. METALS TECHNICAL OUTLOOK 1/30/2006 COMEX SILVER (MAR) 01/30/2006: The market made a new contract high on the rally. Momentum studies are trending higher but have entered overbought levels. The cross over and close above the 18-day moving average indicates the longer-term trend has turned up. The close over the pivot swing is a somewhat positive setup. The next upside objective is 982.8. The next area of resistance is around 970.5 and 982.8, while 1st support hits today at 950.5 and below there at 942.8. COMEX GOLD (APR) 01/30/2006: 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 downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is now at 556.4. The next area of resistance is around 567.9 and 573.1, while 1st support hits today at 559.5 and below there at 556.4.
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 Monday, 30 January 2006 | 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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