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-- Posted Monday, 20 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -0.70, SILVER +2.00
London Gold Fix $554.25 -$1.25 LME COPPER STKS 131,950 ml tns -400 tns
COMEX GOLD stks 7.525 ml oz -584 oz COMEX SILVER stks 125.8 ml oz -19 oz OVERNIGHT ACTION: Chinese spot gold higher off reports of "steady" bank buying. GOLD: Despite what could have been considered very favorable developments overnight, the US metals markets are showing some disjointed early action. In fact at times early today, copper and gold prices were weaker, while silver and platinum were higher. After the US saw dampened inflation readings last week, seeing the German producer price Index rise to the highest level in 24 years should provide an underpin to prices to start the week. However, the metals markets could be somewhat undermined off expectations for a soft leading indicator report from the US on Tuesday morning. In the last weekly COT report, the March 14th Commitment of Traders with Options report showed the Gold to have reduced its net spec long position by roughly 18,000 contracts, with the combined Non-Commercial position and Non-reportable position still coming in at a partially overbought 134,000 contracts. In addition to last week's highs around $558.6, the April gold contract has a critical moving average hovering just above the market this morning at $558.7. With the US equity markets showing another round of new highs early this morning, we suspect that the market will generally be able to discount a weak Leading Indicator report Tuesday morning but we also get the sense that upside momentum in the near term will remain unimpressive. Critical pivot point support in April gold comes in this morning at $555.1. The bulls have an edge but their control is minimal at best. SILVER: While the Press is trumpeting a coming top in silver, we have to think that the favorable progression in world equity prices and ongoing talk about impending ETF's leave the bull camp with an edge. We also have to think that recent historical price action in both copper and zinc give silver an additional industrial metal benefit that the gold market isn't getting. The top of the up trend channel in May silver is seen today at $10.493 and the market might have initial support this morning at $10.35. The March 14th Commitment of Traders with Options report showed the Silver Non-Commercial position to be net long 49,159 contracts, with the Non-reportable position net long 23,195 contracts for a combined spec long position of 72,000 contracts. With the silver market coming into the action this morning, 16 cents above the level where the COT report was measured, we suspect that the spec long positioning in silver is understated. Unless the outlook toward the economy is altered, or the upcoming PPI report is surprisingly weak, we have to assume that the path of least resistance is up in this market. METALS TECHNICAL OUTLOOK 3/20/2006 COMEX SILVER (MAY) 03/20/2006: A new contract high was made on the rally. 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. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside target is 1051.4. The next area of resistance is around 1043.3 and 1051.4, while 1st support hits today at 1029.8 and below there at 1024.4. COMEX GOLD (APR) 03/20/2006: Positive momentum studies in the neutral zone will tend to reinforce higher price action. A positive signal for trend short-term was given on a close over the 9-bar moving average. The daily closing price reversal down is a negative indicator for prices. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside objective is at 561.4. The next area of resistance is around 558.1 and 561.4, while 1st support hits today at 552.1 and below there at 549.3.
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-- Posted Monday, 20 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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