The Prime Minister of Greece stated that any restructuring of Greek debt would result in the collapse of banks in his country. The Japanese government announced that damage from the Sendai earthquake and tsunami could cost over $300 billion. US economic numbers to be released this morning include February New Home Sales at 9:00 AM, and a private survey of mortgage applications released before the opening. In addition, Fed Chairman Bernanke will give a speech during the session.
GOLD MARKET FUNDAMENTALS
At least in the early action today, April gold has managed a rise above the prior session's high. Gold seems to be catching some lift off news that the Japanese disaster might end up costing as much as $300 billion. However, the upward track in gold and other physical commodity prices might be held back because of fears that containment of the #3 reactor at Fukushima has seen a setback overnight as commodities generally don't like to see developments that could end up slowing the economy.
Talk that a Chinese gold company might be looking to acquire gold mines in other countries is probably giving gold a lift, as that news follows a pattern seen from China in a host of other physical commodity markets. With all the metals markets showing initial gains today, the gold market isn't faced with price divergence, as it was in the Tuesday trade and some traders are hopeful that a minor rise in US New home sales figures will provide gold an added lift. However, the Fed's Fisher is also scheduled to speak today and yesterday he generally sounded a hawkish tone.
The US Fed Chairman is also scheduled to speak just ahead of mid session today and some traders think he will largely countervail the dialogue from Fisher. It is also possible that gold will garner some support from a bullish price forecast from a gold company executive, who suggested that gold might have a "couple" more years of upside action before a top was formed.
Comex Gold Stocks were unchanged at 11.028 million ounces. At least in the early action today, April gold has managed to hold above the $1,425 level and that probably becomes a thin layer of support for the trade. However, the failure to hold above $1,423 could be a bad technical trade today, especially if that move coincides with a resurgence of trouble at the beleaguered nuke plant in Japan or a resurgence of the Dollar in the wake of renewed Euro zone debt concerns. As was seen in the early March slide, the most negative threat to gold prices continues to be fears of severe global slowing off one or two situations currently facing the markets.
However, if the fear of slowing comes off rising oil prices, then gold might actually find a way to rise. We continue to think that being long gold carries more risk than being long silver, as silver could benefit from flight to quality conditions or from growth prospects. For the gold bulls it would be a positive development to see April gold manage an early rise above this week's high of $1,435.10, as that could prompt some stop loss buying by the shorts.
SILVER MARKET FUNDAMENTALS
The May silver contract has started the Wednesday trade close to the prior session's highs and a minimal rise in prices this morning could prompt some technically related follow through buying action. The bull camp is hopeful that the situation in Japan continues to come back under some semblance of control, while the bear camp wants to suggest that soaring oil prices and continued supply chain glitches off the Japanese disaster is set to trip up the global recovery.
Therefore, the silver bulls are hopeful of a minor improvement in US new home sales figures and perhaps they are also expecting some dovish commentary from the US Fed Chairman around mid session. However, the silver market will also see additional commentary from the Fed's Fisher early in the trade today and yesterday his dialogue was seen as hawkish. At least in the early trade today, outside market action seems to be favoring the bull camp in silver as all the metals markets are higher and US equities are higher. Comex Silver Stocks were 104.345 million ounces up 982,858 ounces. Comex Silver stocks are at their highest levels in the past 10 sessions.
The bulls seem to have an edge today, as US equities are higher, the rest of the metals complex is trading higher and the trade is generally expecting positive scheduled data flow from the US. However, there might have been a setback at one of the troubled reactors in Japan this morning and a rekindling of widespread radiation contamination fears could temper the initial bullish bias. Critical support in May silver seems to have moved up to $36.29, with little in the way of resistance seen until $36.50. While it might take a positive trade in US equities and favorable news from Japan to launch silver significantly higher, we have to leave the bull camp with the edge in the trade today.
METALS TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.
COMEX GOLD (APR) 03/23/2011: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The market's short-term trend is positive on the close above the 9-day 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 1438.9. The next area of resistance is around 1432.7 and 1438.9, while 1st support hits today at 1419.9 and below there at 1413.3.
COMEX SILVER (MAY) 03/23/2011: The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The nearterm upside target is at 3696.3. The next area of resistance is around 3673.7 and 3696.3, while 1st support hits today at 3602.3 and below there at 3553.4.source www.stockmarketsreview... For the latest updates PRESS CTR + D or visit Stock Market news Today
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