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-- Posted Tuesday, 28 March 2006 | Digg This Article
METALS: OVERNIGHT CHANGES THROUGH 4:00 AM: GOLD -3.70, SILVER -4.50
London Gold Fix $563.75 -$.25 LME COPPER STKS 120,925 ml tns -3,025 tns
COMEX GOLD stks 7.526 ml oz Unchanged COMEX SILVER stks 125.2 ml oz +276,197 oz OVERNIGHT ACTION: Chinese spot prices overnight played catch up to Monday's gains. GOLD: With the metals market all moving upward in sync yesterday and the Dollar mostly behaving itself, the gold market comes into the action today partially overbought but not nearly as vulnerable as it was for most of last week. With Taiwan gold starting trade yesterday and Budapest to begin trading gold contracts on April 20th, it is clear that interest in the metals is rising. In retrospect, some of the last two session's gains were probably fueled by a prediction that soaring Chinese currency reserves were probably going to result in the Chinese Central bank increasing its holdings of gold. Therefore, in addition to the rising speculative interest in gold, there continues to be a distinct chance to see rising physical demand. It should be noted that the new high for the move close yesterday, in the April gold contract, managed to regain a down trend channel resistance line that was formed off the February through March down trend and with the 50 day moving average also regained late last week, a number of technicals have turned positive in the gold market. Critical support off that down trend channel line comes in today at $566.1, which happens to be right on the current trade. That trend line point actually falls down to $565.7 on Wednesday and the reason we bring that up, is that the market hasn't totally moved beyond the liquidative posture seen since the February high. In fact, without a pulse higher today and an approach of the March high of $572.5 before the end of the week, a portion of the bull camp could come away from the recent rally attempt disappointed. In fact, the gold market has seen a really steady flow of bullish news since the surprise reversal last Friday morning and it needs to extend the gains to put the bear camp back on its heels. In fact, that Chinese gold reserves talk might even give gold a distinct advantage over silver! SILVER: With a number of metals analysts suggesting that the silver market will be unable to absorb the influx of ETF shares there would seem to be some skepticism left in the market and that is a good sign for the bull camp. In other words, it would be even more concerning if the Press headlines were conclusively bullish. In our opinion, seeing some silver contracts touch the psychologically important $11.00 level in relative proximity to the floating of the ETF's, serves to solidify long interest in the silver market. Yesterday the market saw news that Dubai would begin to trading silver today and while that might pull trade from existing silver markets and from the ETF sector, that move probably brings in fresh buying interest. With German Business confidence reaching a 15 year high overnight and the platinum and base metals prices this morning mostly positive, we suspect that will help silver avoid the type of profit taking seen in the gold market early today. Trend line support in May silver comes in at $10.44, but some traders might suggest that the market has closer-in support at $10.73. METALS TECHNICAL OUTLOOK 3/28/2006 COMEX SILVER (MAY) 03/28/2006: The rally brought the market to a new contract high. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market's close above the 9-day moving average suggests the short-term trend remains positive. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The near-term upside objective is at 1103.4. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1097.3 and 1103.4, while 1st support hits today at 1081.8 and below there at 1072.4. COMEX GOLD (APR) 03/28/2006: The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. A positive setup occurred with the close over the 1st swing resistance. The near-term upside objective is at 572.1. The next area of resistance is around 570.1 and 572.1, while 1st support hits today at 564.6 and below there at 561.0. I wish to begin reiterating our "trend" opinion, so that traders don't forget that the "Daily" comments are in fact just "daily comments". In other words, we take the stance that the daily comment is a venue to bring in the freshest overnight developments and to suggest what fundamental impact the new developments might have on prices for that day, even if the comments are bearish within the confines of an entrenched bull market pattern. We might also suggest that trader's who are unclear on our long term opinion, should always refer to the existing trade suggestions for clarification of where we think the market is headed to over the long term.
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 Tuesday, 28 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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