|
-- Posted Wednesday, 8 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -2.60, SILVER -7.50
London Gold Fix $548.65,-$10.05 LME COPPER STOCKS 100,450 m tns, -225 COMEX GOLD stks 7.316 ml oz -2411 COMEX SILVER stks 125.5 ml oz -55,495 OVERNIGHT ACTION: Softer overnight on follow through from yesterday's sharp declines, but physical interest out of the Middle East and Asia. GOLD: The gold market broke hard yesterday on mostly profit taking and some panic selling after the market had gotten overbought and had failed to advance on the 25-year highs it posted last week. Overnight in Asia the markets extended yesterday's declines in New York, but came back as the lower prices encouraged some physical buying from jewelers and investors in Asia and the Middle East. It is not surprising that the market sold off given its $83-dollar gain since mid December. The flight to quality issue has quieted down as the Iranian nuclear standoff has more or less reached a plateau, with the IAEA giving Iran until March 6th to respond to their complaint before referring the issue to the UN Security Council and China even suggesting yesterday that going to the Council was not necessarily the next step. Also, energy prices were down sharply yesterday, and the dollar has held steady despite a recent turnaround in the yen. It should be encouraging to the bulls that lower prices brought seemed to encourage buying activity overnight, lending support to the idea that what we saw was just a correction in a long term bull market. A number of commodities experienced sharp price declines yesterday, and the volatility probably has more to do with the increased involvement by fund trading than any specific change in the fundamentals for the gold market. We were able to buy back our short $600 March calls yesterday and will look for an opportunity to buy on the break, which could come at 547.80 basis April gold, which is the 0.382 retracement of the rally from December 19 to last week's high. SILVER: Silver also experienced sharp declines yesterday on a wave of profit taking that occurred across the metals as well as many other commodities. Lacking any new fundamental development, this appears to be a technical correction on an overbought market, enhanced by the increasing amount of speculative participation. March silver extended yesterday declines overnight. Look for retracement support at 9.31 and 9.12 in the March contract. METALS TECHNICAL OUTLOOK 2/8/2006 COMEX SILVER (MAR) 02/08/2006: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The close below the 18-day moving average is an indication the longer-term trend has turned down. The gap lower on the day session chart is bearish and puts the market on the defensive. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside objective is now at 916.7. The next area of resistance is around 955.8 and 975.6, while 1st support hits today at 926.3 and below there at 916.7. COMEX GOLD (APR) 02/08/2006: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market back below the 18-day moving average suggests the longer-term trend could be turning down. The gap lower price action on the day session chart is a bearish indicator for trend. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is 542.1. The next area of resistance is around 562.8 and 574.4, while 1st support hits today at 546.7 and below there at 542.1.
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 Wednesday, 8 February 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.
Previous Articles by Nell Sloane
|
