GENERAL MARKET CONDITIONS

A great performance by all metals this week on the back of a lack of major market moving news. No News is Good News for the markets. I am concerned over the pace of the rise of the metals especially of the base metals. The rise has been too swift. When we write that LME copper will to rise to $9000 and more in the next two to three months, it does not mean that LME copper rises $100-$150 every day. Why is it happening? Earlier manufacturers were maintaining reduced their inventory levels on expectations on a further fall in prices. Now as copper prices zoom, manufactures have increased their copper inventory and have also started hedging in the future markets as copper price rise has caught them off guard. Copper demand in the futures market as well as the physical market rises. The same is with all the base metals.

Gold has risen $50 in one week. At this pace gold should rise to $1200 by March. Scary investors are investing in gold as they expect Fed to cut interest rates every meeting to nearly zero. I have mentioned in the past also that interest rate cuts are no solution to excesses done by the Fed and other central banks. Even one bit of positive economic numbers next week from the US can reverse gold and equity gains. Gold rises at $50 a week and the subsequent high volatility will harm the jewelers as they sit idle.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$942.0

$956.30 priced target achieved. Gold has to break $959-$965 zone for $978 and $989. Key support at $938, $931.60

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $102.0

Failure of crude oil to break $102 by next week will result in a fall to $93.20 and $89.60


MCXARUN
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