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-- Posted Thursday, 16 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -1.40, SILVER -5.50
London Gold Fix $553.25 +$2.00 LME COPPER STKS 133,250 ml tns -1,475 tns
COMEX GOLD stks 7.527 ml oz -164 oz COMEX SILVER stks 126.0 ml oz Unchanged OVERNIGHT ACTION: Slightly softer trading tone in Asia off a weaker Japanese Yen. GOLD: Yesterday the gold market started off soft but managed to carve out a fresh high for the move. Today we are a little more skeptical as the gold market will have to face what is expected to be a muted US CPI report. Fortunately, for the bull camp, the US Dollar is softer and the US equity market is pointing to forward progress in the US economy. We also see slightly weaker energy prices early this morning and therefore a number of outside market forces appear to be hinting at weakness in gold prices. Internally, the gold market might get some support from news that Indonesian protesters have killed two police officers and were also seeking to have the Freeport-McMoran gold mine closed. It is also possible that the gold market is partially supported by news that Barrick Gold had decided to purchase all of the remaining shares of Placer Dome. In the end, with doubt that the internal gold market fundamentals are strong enough to countervail the drag from the external factors, but we do suspect that the buying action of the prior three sessions will serve to underpin the gold market around close-in support of $549.6. On the other hand, the market seems to be downplaying the CPI report this morning and therefore it might not take much of an up tick in the reading (expectations +0.1 to +0.2) to alter the early negative bias in the gold market. In the event, that the early numbers prompt the April gold market to violate initial support of $549.6, prices could then slide toward more significant support down at $547.8. SILVER: After making an impressive run to 22 year highs yesterday, the silver market is probably a little overbought, but the run up over the last 5 sessions seems to suggest that investors and traders are still very interested in the long side of silver. While the ETF issue contributed to the run up in prices over the last two sessions, we also get the sense that silver is indeed finding favor over gold. We also think that the industrial demand component in silver is adding to the upside and with a number of key global equity markets making significant highs yesterday and this morning, the demand outlook for silver remains positive. While we suspect that the US CPI report this morning will influence silver this morning, that influence will probably be indirect and muted. Close-in support in May silver comes in at $10.26, with the next lower support zone not seen until $10.17. On the other hand, seeing May silver rise back above $10.33 could rekindle fresh technical buying interest. METALS TECHNICAL OUTLOOK 3/16/2006 COMEX SILVER (MAY) 03/16/2006: The market made a new contract high on the rally. 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 next upside objective is 1048.9. The next area of resistance is around 1042.8 and 1048.9, while 1st support hits today at 1027.3 and below there at 1017.9. COMEX GOLD (APR) 03/16/2006: The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The next upside target is 561.0. The next area of resistance is around 557.5 and 561.0, while 1st support hits today at 551.3 and below there at 548.5.
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-- Posted Thursday, 16 March 2006 | Digg This Article
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