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-- Posted Wednesday, 22 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -1.40, SILVER -0.50
London Gold Fix $551.75 -$1.65 LME COPPER STKS 108,550 ml tns +3,125 tons
COMEX GOLD stks 7.525 ml oz -3,215 oz COMEX SILVER stks 126.7 ml oz +538,956 oz OVERNIGHT ACTION: European gold slightly lower possibly due to a resurgent US Dollar. GOLD: While the trade expects buying interest to underpin gold in the coming session, the near term bias might have shifted back in favor of the bear camp. However, there would seem to be a moderate escalation in Middle East tensions, with Iran promising to finance Hamas, in the wake of news that Israel was going to withhold tax revenues collected for the Palestinians and that should in conjunction with recent Nigerian developments, keep investment flowing toward the precious metals. Recently the metals markets have been driven by pure physical buying interest and not by flight to quality or inflation expectations but that pattern could change today if the CPI registers a hot reading. We must note that some economists are expecting today's US CPI reading to register an inflation warning and therefore it is possible that gold gets a fresh focus in the action today. However, without headline help this morning we can't rule out a return to consolidation support down around $550 basis the April contract. In fact considering the back and forth action in gold over the last month, the bull camp might "need" to see a relatively hot reading in the CPI report just to discourage the market from falling back into a sloppy pattern. In order to spark a fresh wave of buying today, the April gold might have to manage an early climb back above the critical $560 resistance level. SILVER: Not surprisingly, March silver has managed to hold almost all of the gains forged early on Tuesday and that seems to suggest that silver is the leadership market in the precious metals complex. We suspect that significant strength in copper and other base metals markets lent support to silver, which is currently trading like a precious metal and is also trading like a base metal. Therefore, silver could benefit from a hot CPI report and could also benefit from indications that the world economy continues to grow. March silver has initial support on the charts at $9.50 and then again down at $9.47 but a trade above $9.545 could rekindle technically orientated buying by the funds. METALS TECHNICAL OUTLOOK 2/22/2006 COMEX SILVER (MAR) 02/22/2006: The daily stochastics gave a bullish indicator with a crossover up. Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market back below the 18-day moving average suggests the longer-term trend could be turning down. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. With the close over the 1st swing resistance number, the market is in a moderately positive position. The near-term upside target is at 960.9. The next area of resistance is around 957.8 and 960.9, while 1st support hits today at 951.3 and below there at 947.9. COMEX GOLD (APR) 02/22/2006: A bullish signal was given with an upside crossover of the daily stochastics. Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market back below the 18-day moving average suggests the longer-term trend could be turning down. The market has a slightly positive tilt with the close over the swing pivot. The next upside target is 561.2. The next area of resistance is around 559.0 and 561.2, while 1st support hits today at 554.2 and below there at 551.7.
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-- Posted Wednesday, 22 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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