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-- Posted Friday, 3 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +0.50, SILVER +9.10
London Gold Fix $568.60 +$4.85 LME COPPER STKS 120,975 ml tns +2,600 tons
COMEX GOLD stks 7.518 ml oz -98 oz COMEX SILVER stks 129.0 ml oz +1.14 ml oz OVERNIGHT ACTION: Some international gold markets played catch up to US gains on Thursday but no fresh gains were posted in gold in the overnight action. Silver on the other hand extended the prior days gains and is holding all of the gains. GOLD: From our perspective, the gold market continues to lag behind silver and with the Dollar showing significant weakness yesterday, we would have expected an even more impressive run up in gold prices. However, seeing the market manage new highs for the move has served to reverse the negative sentiment that was in place at the beginning of the week. In fact, with April gold managing to climb above the $570 level in the last 24 hours, it would seem like the trade is attempting to establish a higher trading range. We suspect that favorable US ISM readings and a firming of energy prices has rekindled inflation views and that was a timely development when one considers the ramping up of global interest rates. While a persistently lower Dollar will help gold track alongside silver and platinum, to really restart the bull trend in gold prices, could require a stronger economic outlook and more significant inflation fears. In the mean time, the edge would seem to stand with the bull camp, but we do get the sense that gold will look to silver and platinum for direction. Fortunately the silver market seems to be getting a moderate amount of bullish information and that could keep the overall outlook toward metals upbeat, until the pace of the economy can resume its control. Initial resistance today is $574.3 and close-in support is $569. SILVER: With a significant new high thrust in the overnight action and the trade playing up the hopes of an ETF offering, it certainly seems like silver is poised to close the valuation gap with gold. With the trade expecting incoming Index fund type buying, platinum and copper showing positive action and the outlook for physical demand pointing up, we suspect that a quick run to $1,050 is possible. So far the recent sharp (potentially short term) rise in exchange stocks hasn't discouraged would-be buyers. Even more surprising is the fact that silver didn't weaken in the face of news that the Mexican strike had ended. In other words, this market is capable of rising in the face of bearish news and that is a testament to the strength of the bull case. The bulls control but the sharp rate of climb means that close-in support could be thin and volatility could expand in the coming sessions. METALS TECHNICAL OUTLOOK 3/3/2006 COMEX SILVER (MAY) 03/03/2006: A new contract high was made on the rally. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside target is at 1054.3. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1042.6 and 1054.3, while 1st support hits today at 999.1 and below there at 967.3. COMEX GOLD (APR) 03/03/2006: Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. Market positioning is positive with the close over the 1st swing resistance. The near-term upside objective is at 575.7. The next area of resistance is around 573.8 and 575.7, while 1st support hits today at 567.0 and below there at 562.1.
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 Friday, 3 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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