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-- Posted Thursday, 2 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +3.00, SILVER +14.50
London Gold Fix $571.85 +4.65 LME COPPER STOCKS 95,850,metric -150 tns COMEX Gold stks 7.268 ml oz -53,036 oz COMEX SILVER stks 124.8 ml oz Unchanged OVERNIGHT ACTION: Gold made new highs overnight in Asia but gains were limited by some physical selling in Thailand and Indonesia. GOLD: After a minor setback yesterday, gold traded to new highs overnight and appears ready to resume its uptrend this morning. The gold market exhibited significant volatility early in the session yesterday, swinging from early weakness into an early rally that failed to hold through the scheduled economic numbers in the morning. At times the Dollar was quite strong, and we assume that element discouraged a few would-be buyers and allowed the market to slide aggressively. The press continues to carry reports of ongoing investment demand for gold and some traders continue to point to the prospect for increased central bank buying of gold. Reports of physical sales in Indonesia and Thailand overnight may be insolated, as Asian business is mostly quiet this week do to the Lunar New Year. Tensions over Iran's nuclear ambitions have underpinned gold recently. The International Atomic Energy Agency governing board is to meet today to discuss Iran's nuclear program, and with Russia and China on board to take the issue to the UN Security Council, that situation could heat up. Earlier this week Russia indicated that they would see a 1.2% decline in 2006 gold production and that reiterates the potential for ongoing tightening of the gold supply and demand condition. In the wake of the strong performance overnight, we think April gold will trade to new highs this morning. SILVER: Silver tracked higher overnight, more or less dismissing yesterday's modest correction, and it appears poised to make an attempt at the recent high at 9.95 today. With the investment theme seemingly firmly entrenched, we are on the lookout for a quick rejection of any concentrated selling interest, and that may have occurred yesterday. METALS TECHNICAL OUTLOOK 2/2/2006 COMEX SILVER (MAR) 02/02/2006: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The cross over and close above the 18-day moving average is an indication the longer-term trend has turned positive. The close below the 1st swing support could weigh on the market. The next upside objective is 997.5. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 989.0 and 997.5, while 1st support hits today at 970.1 and below there at 959.5. COMEX GOLD (APR) 02/02/2006: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market now above the 18-day moving average suggests the longer-term trend has turned up. The market tilt is slightly negative with the close under the pivot. The next upside objective is 581.8. The next area of resistance is around 578.4 and 581.8, while 1st support hits today at 569.6 and below there at 564.2.
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-- Posted Thursday, 2 February 2006 | Digg This Article
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