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-- Posted Wednesday, 8 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -3.20, SILVER -8.70
London Gold Fix $548.60 -$5.65 LME COPPER STKS 125,725 ml tns +1,675 tns
COMEX GOLD stks 7.517 ml oz Unchanged COMEX SILVER stks 127.8 ml oz -600,037 oz OVERNIGHT ACTION: Reports of fund liquidation in Japan caused renewed selling pressure. GOLD: After reports of fund selling in Japan and talk of Bank selling in China, it would certainly seem like the US Gold market will be under moderately significant pressure into the opening this morning. With the Dollar rising to the highest level since February 17th in the action yesterday and oil prices periodically weak, the bull camp is under attack from a number of fronts. In fact, with the April gold failing to hold the $550 level in the overnight action, the market might be without close-in support until the $545.2 level. In a positive note, Singapore gold did show some initial gains, as some players there seemed to be playing for a bottom, but apparently global sellers continue to outnumber global buyers. We even have to wonder if all the hawkish interest rate dialogue is adding to the liquidation tilt in the market and if one also considers the recent weak pattern of oil prices, it is clear that the inflation component in gold is being undermined. Unless the US economic numbers gather pace, the Dollar weakens or the inflation threat is revived, we can't rule out a slide down to the $540 level basis the April gold. In fact, until the market is presented with concentrated buying interest, traders should continue to hold short call/long put positions against long futures positions. SILVER: The silver market remains vulnerable to liquidation despite the fact that it periodically tried to lead the metals complex higher yesterday. Certainly the silver market was boosted yesterday by stories that an ETF silver fund was possibly going to begin trade in London by the end of this month. In our opinion, the ETF benefit is a relatively new element in the trade, which to date might have only imputed $.50 to $.70 cents into the price of silver. However, in the event that a silver ETF begins trading and is met with expanding interest, we suspect that silver prices will move to an even higher trading range. On the other hand, the demand for a silver ETF issue is only going to be as good as the demand for silver, silver futures and silver calls. In other words, just because there is a new way to invest in silver, doesn't instantly insure that the fundamental buzz toward silver as an investment will suddenly brighten. In our opinion, the big picture trend in the silver market is still bullish, but the market is temporarily off balance. Like gold, we suspect that the outlook for the economy and a partially muted inflation track has temporarily derailed the bull theme. Channel line support in the May silver is $9.85 and that might be a point that long futures players could liquidate short call/long put combinations. METALS TECHNICAL OUTLOOK 3/8/2006 COMEX SILVER (MAY) 03/08/2006: Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. The close over the pivot swing is a somewhat positive setup. The near-term upside objective is at 1022.6. The next area of resistance is around 1018.2 and 1022.6, while 1st support hits today at 1003.3 and below there at 992.6. COMEX GOLD (APR) 03/08/2006: The daily stochastics gave a bearish indicator with a crossover down. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. The market's close below the pivot swing number is a mildly negative setup. The next downside objective is 545.9. The next area of resistance is around 558.6 and 562.3, while 1st support hits today at 550.4 and below there at 545.9.
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 Wednesday, 8 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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