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-- Posted Thursday, 23 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -3.00, SILVER -2.50
London Gold Fix $548.00 -$.50 LME COPPER STKS 126,100 ml tns -2,900 tns
COMEX GOLD stks 7.526 ml oz Unchanged COMEX SILVER stks 125.8 ml oz Unchanged OVERNIGHT ACTION: Generally weak price action continued with Chinese prices following the world price lower. GOLD: Apparently one analyst isn't the least bit deterred by the sloppy price action of the last two months, as the Press yesterday carried his projection that called for gold prices to be roughly 10 times their current value. However, in order for gold to avoid a $10 per ounce slide, in the coming sessions, and in the process giving off the impression of a top on the charts, it will have to get its fundamental and technical house in order. From a fundamental perspective, the gold market continues to be dogged by a number of factors, with the most important factor being the rather unimpressive view toward near term growth. Rounding out the near term limiting factors are; periodic strength in the Dollar, tempered inflation expectations and perhaps alternative interest in silver, platinum and copper. About the only positive story present in the news overnight are suggestions that Asian jewelry demand remains strong, but event that story was countervailed by suggestions that investment demand in Asia remains slack. From a technical perspective, the gold market remains moderately overbought and with a pattern of "lower highs" and "lower lows", since the February high, there is certainly growing concerns of a broadening top! While we seriously doubt that the "big trend" has run its course, we can't currently call for a snap end to the profit taking! In fact, the majority of near term fundamental factors would seem to suggest that April gold will test $540 before testing $558.6 again! Those that are long futures should consider standing aside and re-entering the June, once the April contract falls to $539. SILVER: While the silver market has certainly carved out a significantly more impressive chart pattern than gold this week, we still get the sense that the market is vulnerable to some profit taking. In fact, with an option expiration looming ahead and the silver market potentially seeing a moderately overbought COT reading Friday afternoon, we would not be surprised to see the market back and fill. While we suspect that new investment interest will cushion the market and in the process prevent the market from a major washout, we wouldn't be surprised to see a correction down to $10.36 basis the May contract. Bottom of the up trend channel comes in down at $10.06. Given the ETF hype, we will assume that silver will easily continue to outperform the gold market. Those that took our advice to sell an April silver $10.00 call for 30 cents and to buy a May silver $10.25 call should look to a correction back to $10.34 in the coming two session to liquidate the short call for 35 or 37 cents! METALS TECHNICAL OUTLOOK 3/23/2006 COMEX SILVER (MAY) 03/23/2006: A new contract high was made on the rally. Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative. The close over the pivot swing is a somewhat positive setup. The next upside target is 1063.4. The next area of resistance is around 1055.3 and 1063.4, while 1st support hits today at 1043.8 and below there at 1040.4. COMEX GOLD (APR) 03/23/2006: The major trend has turned down with the cross over back below the 60-day moving average. Positive momentum studies in the neutral zone will tend to reinforce higher price action. A negative signal for trend short-term was given on a close under the 9-bar moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside objective is at 556.2. The next area of resistance is around 554.4 and 556.2, while 1st support hits today at 549.0 and below there at 545.5.
To those of you who have emailed or commented on the daily commentary regarding price manipulation: our daily comments are strictly to provide our customers and subscribers with news, which may influence the markets marginally on a day-to-day basis. This is not the forum to address price manipulation.
There are multitudes of ways in which one can participate in a bullish or bearish perspective in the metals complex. Mining shares as well as purchasing bullion are just a few. Another investment of choice is through futures and/ or options on futures contracts. If you have traded, then you will be able to appreciate the brokerage service that Nell Sloane and Group can offer. If you have not, and wish to learn more about it, please feel free to contact her staff so that they can forward you some educational literature for your review. Please contact Nell Sloane or a member of her team at 800 238 2610.
-- Posted Thursday, 23 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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