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-- Posted Friday, 24 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -0.60, SILVER -0.50
London Gold Fix $549.75 +$1.75 LME COPPER STKS 124,800 ml tns -1,300 tns
COMEX GOLD stks 7.526 ml oz Unchanged COMEX SILVER stks 125.0 ml oz -764,018 oz OVERNIGHT ACTION: End of week reversal bounce seen in China and European gold markets. GOLD: It is likely that the strength in the rest of the metals markets helped the gold market avoid a more significant correction this week. In fact, with the Dollar rising sharply and April gold falling below a series of critical chart points, we were fearful that April gold was poised to fall back to $540 in the action yesterday. In the early action today, the same divergence between gold and silver is present again and that suggests that gold isn't exactly back on a positive track. However, a recovery in energy prices and a bounce in the stock market would seem to improve the external condition for gold, but we still don't get the sense that the market is going to rekindle the strong physical demand theme. News from the gold mining sector overnight is partially negative, with one company reporting a narrowing of its 4th quarter loss due to increased gold sales volumes, while Anglo American announced that they would reduce their holdings in AngloGold with a stock sale. In looking at the charts this morning it is clear that a pattern of lower highs remains in place and that the $540 level isn't out of the question, especially with the US FOMC meeting looming over the market for 3 more sessions. Without solid outside support from silver and platinum today, we suspect that April gold is set to re-test the $547.3 to $545 level. In conclusion, gold has yet to come back into favor. SILVER: The silver market certainly impressed the trade with an upward extension yesterday in the face of a rising Dollar and slumping gold prices. Certainly the silver ETF situation is fanning the speculative flames and with the market rewarding the speculation with consistent price gains, it is possible that even more money flows toward the market. In fact, while the physical supply and demand fundamentals in silver aren't that impressive, they could be made impressive by the ramping up of implied demand in the wake of surging investment demand! The top of the up trend channel in May silver is seen at $10.71 today and at $10.73 on Monday. As long as the outlook for the global economy is positive, copper and platinum prices are rising, and energy prices maintain a positive trend, we have to think that this market is going to continue to grind out gains. Those that sold April 10.00 calls and bought May 10.25 calls should look to liquidate the April call at 70 today and continue to hold the May $10.25 calls for a position play. METALS TECHNICAL OUTLOOK 3/24/2006 COMEX SILVER (MAY) 03/24/2006: The market rallied to a new contract high. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. A positive signal was given by the outside day up. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside target is at 1091.3. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1083.5 and 1091.3, while 1st support hits today at 1054.5 and below there at 1033.3. COMEX GOLD (APR) 03/24/2006: The daily stochastics have crossed over down which is a bearish indication. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. The market's close below the pivot swing number is a mildly negative setup. The next downside objective is 543.6. The next area of resistance is around 553.7 and 555.3, while 1st support hits today at 547.9 and below there at 543.6.
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 Friday, 24 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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