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-- Posted Wednesday, 22 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -0.10, SILVER +3.50
London Gold Fix $548.50 -$4.80 LME COPPER STKS 129,000 ml tns -1,300 tns
COMEX GOLD stks 7.526 ml oz Unchanged COMEX SILVER stks 125.8 ml oz -31,915 oz OVERNIGHT ACTION: More Chinese Bank selling and more indirect US Dollar pressure. GOLD: While the April gold has managed to hold up around the critical $550 level, it remains vulnerable to liquidation in the wake of more gains in the Dollar. While the US Fed recently talked up the US economy, they also downplayed the threat of inflation by suggesting that inflation remains anchored at low levels. The recent Fed dialogue also undermined the gold market by suggesting that more rate hikes were ahead. Therefore, the spin from the Fed is negative toward gold in 2 out of 3 instances, with the end result coming in the form of a higher Dollar and lower Gold pricing. We also suspect that ongoing weakness in energy prices is discouraging buyers! About the only outside positive for gold is that silver, platinum and copper are showing relative strength and that might be keeping the gold sellers from becoming even more aggressive. However, the inability to hold above $550 this morning might project a slide down to lower consolidation support of $540. Apparently the ETF news in silver is currently incapable of supporting gold. In conclusion, the path of least resistance is pointing down in gold and more weakness is anticipated. In order to turn the down trend pattern around, April gold might have to regain the $556 to $558 level. SILVER: Now that the ETF has been authorized by the SEC, we suspect that some of the supportive hype from the situation will die down but we suspect that a generally positive bias will remain in place. In other words, just because the market has a new investment vehicle doesn't necessarily guarantee that conditions will continue to attract investment to the new vehicle. On the other hand, persistent strength in copper, platinum and zinc prices would seem to provide some ongoing buying interest to silver, which seems to have maintained a bullish chart pattern. We do think that weakness in gold and strength in the Dollar is holding back silver, but given the new investment buzz, we suspect that silver will still attempt to track its own fundamentals. Top of the up trend channel in May silver is seen at $10.60, with the bottom of the up trend channel seen down at $10.05. Closer-in support might be seen this morning at $10.47. METALS TECHNICAL OUTLOOK 3/22/2006 COMEX SILVER (MAY) 03/22/2006: A new contract high was made on the rally. Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. The outside day up is a positive signal. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside objective is 1089.1. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1077.8 and 1089.1, while 1st support hits today at 1035.3 and below there at 1004.2. COMEX GOLD (APR) 03/22/2006: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The intermediate trend has turned down with the cross over back below the 18-day moving average. The market's close below the pivot swing number is a mildly negative setup. The near-term upside target is at 560.4. The next area of resistance is around 557.2 and 560.4, while 1st support hits today at 549.2 and below there at 544.4.
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-- Posted Wednesday, 22 March 2006 | Digg This Article
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