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-- Posted Friday, 10 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGE to 4:00 AM:London Gold Fix $558.75, -$1.50 LME COPPER STOCKS 99,175 ml tns, -25 COMEX GOLD stks 7.387 ml oz +10,330 COMEX SILVER stks 125.5 ml oz UNCH OVERNIGHT ACTION: Down overnight in Japan on profit taking and a stronger yen. www.nsfutures.com GOLD: While the long term outlook for gold remains bullish, the market has entered a period of high volatility in the wake of reaching new 25 year highs this week. For the second time in a week, strong gains in the Yen sparked new rounds of gold selling in Asia. The Yen gained ground after strong economic data out of Japan helped renew speculation that the Bank of Japan may begin to pursue a tight monetary policy. Japanese investors are becoming more cautious, especially with what appears to be a major bottom developing in the Yen, and this is a concern to the bulls because they have been a key supporter of gold in this rally. Comments by the Chicago Fed president yesterday reinforced expectations that the Fed will tighten rates at least one more time, which is generally supportive to the dollar. However if this morning's trade deficit data comes in larger than the expected $65 billion, the dollar could weaken and precious metals could stand to gain. The strong world economy supports gold consumption for both industry and jewelry, and inflationary trends across the commodities promote gold as a store of value, particularly with the growth of index funds as investment vehicles. The market remains very responsive to Middle East tensions and to US security concerns, as yesterday's sharp rally in response to the "mysterious vapor," at the US Senate Office Building would attest. The market is volatile, but we do not recommend selling into a long term bull market and prefer maintain a buy breaks mentality. However, since we can't rule out a $50 per ounce break along the way, we prefer use options as a protective force in conjunction with a long futures position. SILVER: After making strong gains yesterday, silver also declined overnight when the yen rallied and gold fell. Like gold, silver is in a long term uptrend that deserves attention on breaks. March silver more or less held support this week at the top of the January consolidation but may retest that before it resumes the uptrend. METALS TECHNICAL OUTLOOK 2/10/2006 COMEX SILVER (MAR) 02/10/2006: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The market now above the 18-day moving average suggests 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's close above the 2nd swing resistance number is a bullish indication. The next downside target is 947.2. The next area of resistance is around 973.8 and 978.1, while 1st support hits today at 958.3 and below there at 947.2. COMEX GOLD (APR) 02/10/2006: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The major trend could be turning up with the close back above the 18-day moving average. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next downside objective is 558.4. The next area of resistance is around 572.0 and 574.1, while 1st support hits today at 564.2 and below there at 558.4. ***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.
-- Posted Friday, 10 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.
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