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-- Posted Monday, 6 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +2.10, SILVER +0.50
London Gold Fix $568.00 -$0.60 LME COPPER STKS 121,175 ml tns +200 tons
COMEX GOLD stks 7.517 ml oz -1,549 oz COMEX SILVER stks 128.4 ml oz -600,696 oz OVERNIGHT ACTION: Chinese gold mixed, while Japanese gold prices were slightly higher. GOLD: While the gold market remains positively poised on the charts, we still get the feeling that the market is lacking the type of concentrated buying interest that propelled the market sharply higher in the November and January rallies. With the February 28th Commitment of Traders with Options report showing the Gold Non-Commercial position to be net long 126,512 contracts and the Non-reportable position also net long 34,072 contracts, the gold market is holding a moderately long positioning but so far the market hasn't seen a rapid expansion of the net spec long. Some in the trade think that Japanese buying interest is the main element required to return prices back to contract highs and that could make the action in the Tokyo market very critical in the weeks ahead. In the mean time, we can't argue against more hard fought gains, especially if the Dollar shows the same type of weakness as was seen last week. However, it will probably take more than a simple slide in the Dollar to get the April gold contract back up to the $580 level this week. While we think that gold remains in a bull trend, we strongly suggest that long futures players sell calls and purchase puts against their longs, as we get the feeling that gold is set to chop back and forth against the trend. Critical support today comes in at $568 and then again down at $566.6. SILVER: Despite the fact that May silver comes into the action this morning 10 cents below last Friday's highs, the bias in the market seems to be favoring the bull camp. However, we are not totally confident that gold will consistently contribute to the bullish mentality in the silver market. In looking at the copper market, we also get a sense that the industrial metals markets might present some choppy action this week! Therefore, we can't rule out a temporary correction to 1,012, but given the aggressive rally last Thursday, we suspect that the market lacks definitively solid close-in support on the charts. The February 28th Commitment of Traders with Options report showed the Silver Non-Commercial position to be net long 43,513 contracts and the Non-reportable position net long 21,558 contracts for a combined spec and fund long of 65,000 contracts. While that is a moderately overbought spec long positioning, the size of the spec long actually declined on the week, but given the gains that took place after the COT report was measured, we suspect that silver comes into the new week long in excess of 73,000 contracts. In short, the market is overbought but still not bought out. As we suggested in gold, we think that the bull market will live on, but we also expect significant volatility. Traders should attempt to control the risk of being long futures with options coverage. METALS TECHNICAL OUTLOOK 3/6/2006 COMEX SILVER (MAY) 03/06/2006: The market rallied to a new contract high. Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next upside objective is 1041.5. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1033.0 and 1041.5, while 1st support hits today at 1014.1 and below there at 1003.5. COMEX GOLD (APR) 03/06/2006: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's short-term trend is positive on the close above the 9-day moving average. The daily closing price reversal down is a negative indicator for prices. It is a slightly negative indicator that the close was under the swing pivot. The next upside target is 573.0. The next area of resistance is around 570.3 and 573.0, while 1st support hits today at 565.6 and below there at 563.5.
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 Monday, 6 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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