GENERAL MARKET CONDITIONS

Traders will be gearing for super Thursday. We have the European central bank meeting and US June non farm payrolls. They will be taking their positions accordingly. Thursdays close can set the trend for rest of July for all metals, energies and the US dollar. As crude oil prices rise we continue to hear voices all over. The US treasury secretary says that they believe in a stronger US dollar. I wonder whether its the same rhetoric as his predecessor John Snow. Whenever John Snow had his comments on reaffirming a stronger US dollar, the dollar index would start to fall in the past. Chinese premiere Wen Jiabao urged the United States to stabilize the dollar. These comments will continue till crude oil prices rise.

Commodities including all metals and energies are rising due to lack of alternate investments in developed markets. Global hedge funds including US state run pension funds are heavily invested in commodities. Global inventories are being manipulated. Fund managers are buying metals like copper, gold, silver and platinum and storing them in private warehouses. When most of the fund managers do the same then global inventories start to fall and these metals rise. This is happening. For commodity prices to fall two conditions must be met. (A) There has to new alternate sources of investments or equity markets rise (B) Global economic uncertainty must fade. Till then commodity prices will remain firm.

SILVER -- SEPTEMBER FUTURE

Silver targets $1930 and $2132 in July as long as $1585-$1600 zone holds on daily closing basis.

MCXARUN
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