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-- Posted Friday, 17 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD +0.50, SILVER +3.80
London Gold Fix $555.50 +$2.25 LME COPPER STKS 131,450 ml tns -1,800 tns
COMEX GOLD stks 7.526 ml oz -999 oz COMEX SILVER stks 125.8 ml oz -209,000 oz OVERNIGHT ACTION: Chinese spot gold marginally higher, with little Forex guidance in the market today. GOLD: The gold market should leave the week in a much better posture than it entered the week. In fact, with gold mostly shaking off the muted inflation situation this week, it is clear to us that a forward progressing global economy is more important to gold, than the inflation or flight to quality buying themes. In the overnight Press, a Chinese consultant suggested that China should build their gold reserves and given the burgeoning Chinese trade surplus, we would think that is a natural progression. With the Dollar also breaking down aggressively this week and potentially headed even lower in the coming sessions, we suspect that gold will continue to see a minor benefit from the currencies. With zinc leaping to a new high overnight and global equity markets in a solid run up, the outlook for good physical demand should leave April gold in a position to rise toward the next resistance level of $560 on the charts. However, while gold has thrown off a large portion of the liquidative tilt seen shortly after the March high, in order to turn the technicals squarely to the upside, the pattern of lower highs must be erased with a rise above a down trend channel resistance line at $569. That resistance line declines to $568.5 on Monday. From initial expectations, the Industrial Production and Capacity Utilization readings this morning should be partially supportive for gold, but the market will need to hold above $553.5 this morning to keep the bias in the market positive. SILVER: Some traders might be a little disappointed with the performance of silver this week, as the market has been unable to carve out more new highs after a very impressive start to the week. However, the silver market highlighted the fact this week that its focus is more of a physical focus than gold, and with the US economic numbers this week a little soft, we can certainly understand the silver market marking a little time just under the old highs. However, with zinc making a new high overnight and the FTSE reaching the highest level since March of 2001, it would seem that the global economy is positive enough to facilitate more new highs in silver. Top of the up trend channel in May silver today is $10.47 and critical pivot point support in the May contract today is $10.30. In order to sprint to new highs this morning, silver might need solid Industrial Production readings and some gains in the energy markets. METALS TECHNICAL OUTLOOK 3/17/2006 COMEX SILVER (MAY) 03/17/2006: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside target is at 1055.5. The next area of resistance is around 1046.9 and 1055.5, while 1st support hits today at 1021.5 and below there at 1004.5. COMEX GOLD (APR) 03/17/2006: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The close above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal up is a positive indicator that could support higher prices. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 563.6. The next area of resistance is around 560.1 and 563.6, while 1st support hits today at 550.7 and below there at 544.7.
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-- Posted Friday, 17 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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