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-- Posted Monday, 13 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGE to 4:00 AM:London Gold Fix $545.25 -$.15 LME COPPER STKS 132,575 ml tns -375 tns COMEX GOLD stks 7.548 ml oz -789 oz COMEX SILVER stks 127.2 ml oz -4,614 oz OVERNIGHT ACTION: Chinese gold was weaker but European gold showed some minor strength. GOLD: While the market might be showing some early strength this morning and the Press is carrying some slightly upbeat views on the near term outlook for gold prices, we are not convinced that the corrective action has totally run its course yet. We have seen signs of renewed long bullion interest, especially in Japan but the Dollar remains a threat to long gold players. While the US payrolls were stronger than expected and indicative of decent growth, the up tick in the US unemployment rate was partially countervailing. We must also note the poor performance in Harmony Mines, which apparently lost money in the 6 months ending in December, as that in a way undermines sentiment toward the precious metals as an investment class. The March 7th Commitment of Traders with Options report showed the Gold Non-Commercial position to be net long 119,811 contracts, with the Non-reportable position also net long 32,960 contracts for a combined spec and fund long of 152,000 contracts. However, since that reading actually fell nearly 8,000 contracts on the week and the gold market comes into the opening this morning about $9 below the level where the report was measured, the technicals are becoming somewhat more balanced. In order to fully rekindle bullish interest in gold, we think the market needs to see persistent strength in the oil market, more economic strength, or less hawkish central bank dialogue. In the near term, we suspect that April gold has initial support at $540 but the failure to hold above that level in the last hour of trade today could easily result in another spike down failure. In our opinion, the best way to play for a bottom is with calendar options spreads. SILVER: The silver market has really held together a lot more impressively on the charts than the gold market. In fact, the May silver comes into the action this morning in a minor upside breakout on the charts. In order to turn up the bullish tilt in the market, May silver might need to climb above $1,012 today. However, in order to keep from rekindling the partially bearish tilt seen early last week, May silver might have to hold above a critical up trend channel line of $9.78. Apparently the payroll report last Friday was just strong enough to give the bulls a slight edge, but we are currently not expecting much in the way of upside momentum. The March 7th Commitment of Traders with Options report showed the Silver Non-Commercial position to be net long 50,104 contracts, with the Non-reportable position net long 22,549 contracts for a combined spec long of 72,000 contracts. Unfortunately, silver actually added longs to its position in the latest COT report and therefore, silver didn't correct its overbought condition as aggressively as gold and that suggests to us that silver might be set to exhibit more near term price volatility than gold. Commitment of Traders with Options - Metals - 1/31/2006 NON-COMMERCIAL COMMERCIAL NON-REPORTABLE NET POS NET CH NET POS NET CH NET POS NET CH Copper 1,015 -1,661 -5,890 -368 4,876 2,031 Gold 140,834 -1,003 -173,802 3,355 32,968 -2,352 Palladium 6,431 1,141 -9,959 -1,494 3,528 353 Platinum 6,658 285 -8,114 -484 1,456 199 Silver 53,505 -2,861 -75,770 2,560 22,265 301 METALS TECHNICAL OUTLOOK 3/13/2006 COMEX SILVER (MAY) 03/13/2006: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market's short-term trend is negative as the close remains below the 9-day moving average. The market's close below the pivot swing number is a mildly negative setup. The next downside target is 968.7. The next area of resistance is around 1007.3 and 1013.6, while 1st support hits today at 984.8 and below there at 968.7. COMEX GOLD (APR) 03/13/2006: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market's short-term trend is negative as the close remains below the 9-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside target is 531.8. The next area of resistance is around 545.4 and 548.1, while 1st support hits today at 537.2 and below there at 531.8.
-- Posted Monday, 13 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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