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-- Posted Tuesday, 21 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +1.70, SILVER +12.50
London Gold Fix $553.40 +$8.05 LME COPPER STKS 105,425 ml tns -375 tons
COMEX GOLD stks 7.528 ml oz -419 oz COMEX SILVER stks 126.2 ml oz +596,263 oz OVERNIGHT ACTION: Minimal gains overnight as the US Dollar distracted some buyers. GOLD: The gold market is showing signs of positive follow through from last Friday's action and initially appears to be lagging behind silver in the early going. Since some gold players suggested that weakness in the energy market, throughout the first half of February undermined the gold market, the market should now be cheered on by the fact that crude oil prices have rebounded by $3.20 a barrel in just 3 sessions. In a partially negative but potentially unimportant development, China reported a 5.5% gain in 2005 gold production, but in the near term, we suspect that the precious metals are capable of discounting shifts in physical supply. However, the Chinese gold production was a record high and that could discourage some buyers. Given the extreme developments in Nigeria over the weekend and the subsequent escalation in energy prices, we suspect that gold will see a minor flight to quality benefit early this week and that April gold might attempt to hold above critical pivot point support of $554.8 early this week. The February 14th Commitment of Traders with Options report showed the Gold Non-Commercial position to be net long 122,542 contracts, with the Non-reportable position net long 34,265 contracts for a combined spec and fund long of 156,000 contracts and that shows a market that is overbought but certainly not bought out. The bias is up but the $560 level might offer significant resistance, especially if the March Dollar manages a rise above a double top level of 90.94 this week. SILVER: While the silver market is showing signs of leadership in the precious metals complex this morning, it will have to hold above $9.50 to keep the early positive bias in place. We suspect that silver will be less restrained by hedge threats, than the gold market but we also think that silver will be paying significantly more attention to the performance of copper and other industrial metals. Therefore, the bias is pointing upward but we are not entirely convinced that the recent corrective action has been completely left behind. In fact, the failure to hold above $9.425 on a close basis could turn the tide against the bull camp and result in a slide to $9.27. The February 14th Commitment of Traders with Options report showed the Silver Non-Commercial position to be net long 46,932 contracts, while the Non-reportable position was net long 23,473 contracts for a combined spec and fund long of 70,000 contracts and that position is probably slightly understated into the opening this morning. The bias is pointing upward but we are not convinced that momentum will be as aggressive as was seen in the second half of January. METALS TECHNICAL OUTLOOK 2/21/2006 COMEX SILVER (MAR) 02/21/2006: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The market back below the 18-day moving average suggests the longer-term trend could be turning down. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is 931.3. The next area of resistance is around 948.0 and 955.3, while 1st support hits today at 936.1 and below there at 931.3. COMEX GOLD (APR) 02/21/2006: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The major trend has turned down with the cross over back below the 18-day moving average. A positive setup occurred with the close over the 1st swing resistance. The next downside target is now at 545.8. The next area of resistance is around 558.5 and 561.8, while 1st support hits today at 550.6 and below there at 545.8.
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 Tuesday, 21 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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