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-- Posted Thursday, 2 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +0.00, SILVER +1.00
London Gold Fix $563.75 +$1.25 LME COPPER STKS 118,375 ml tns +3,100 tons
COMEX GOLD stks 7.518 ml oz Unchanged COMEX SILVER stks 127.8 ml oz Unchanged OVERNIGHT ACTION: Chinese gold prices once again lifted by reports of bank buying. GOLD: The gold market was partially emboldened by the price action on Wednesday, as the upside extension put the market into a technical breakout. The upside move wasn't just important from a technical perspective, but it also served to shore up fundamental sentiment, which had recently begun to slump in the wake of the sustained February washout. In addition to muted inflation fears, generally weaker oil prices throughout February and persistent news of rising gold production, the gold market also saw a run up in the Dollar. However, while a number of fundamentals have improved over the last two weeks, we still haven't seen the type of concentrated physical buying interest return that was the hallmark of the bull market in the July through January time frame. It probably isn't just a coincidence that the recent top in gold prices was seen at the same time that the Press discovered a decline the rate of de-hedging. Therefore, we doubt that the bull trend is complete but it could take a clear cut revival of inflation fears, sharply higher energy prices or significant political anxiety to rekindle a buying wave in gold. The trade continues to fret over the fact that high and volatile price action in gold is reducing jewelry demand. Therefore, we can sense the current upward bias in the market but we also think that the bull track is burning a lot of fuel just to return to the $570 level! In conclusion, the market might grind out additional gains but longs might be advised to carry some option protection! SILVER: The silver market didn't perform very impressively yesterday in the wake of an impressive rally in copper and news of the ongoing strike at a subsidiary owned by Mexico's largest silver Company. In fact, we would have expected the silver to have soared higher in the early action yesterday, given the early weakness in the Dollar and strength in the copper and platinum markets. In the end, the silver just couldn't muster enough buying interest to push prices up toward the February highs. With Striking Mexican Unions now suggesting that workers can go back to work if they want to, we suspect that the silver market will be confronted with a little pressure early today, but we really don't think that the market added much in the way of gains off the whole Mexican strike issue. The bias is still pointing up, but we are not overly impressed with the bull momentum. Near term critical support today comes in at $9.75 and a minor upside breakout takes place with a rise back above $9.86. METALS TECHNICAL OUTLOOK 3/2/2006 COMEX SILVER (MAR) 03/02/2006: The moving average crossover up (9 above 18) indicates a possible developing short-term uptrend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market now above the 18-day moving average suggests the longer-term trend has turned up. The market could take on a defensive posture with the daily closing price reversal down. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 984.3. The next area of resistance is around 976.5 and 984.3, while 1st support hits today at 965.5 and below there at 962.3. COMEX GOLD (APR) 03/02/2006: A positive indicator was given with the upside crossover of the 9 & 18 bar moving average. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The cross over and close above the 18-day moving average is an indication the longer-term trend has turned positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 571.4. The next area of resistance is around 568.4 and 571.4, while 1st support hits today at 563.1 and below there at 560.7.
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 Thursday, 2 March 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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