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Silver is slowly grinding higher and is expected to move through the $33.50/oz range high, based on technical analysis. The metal could meet selling interest near $35/oz-$36/oz.

13 Oct 2011

By Renisha Chainani
Silver is slowly grinding higher and is expected to move through the $33.50/oz range high, based on technical analysis. The metal could meet selling interest near $35/oz-$36/oz.

Appetite for physical silver continues to be strong despite the metal's record of sharp price swings. Sales of U.S. Mint silver eagle coins so far this year are already greater than for the whole of last year, which was itself a record.

Gold
After having broken its long-lasting $1,680/oz resistance, the next resistance for gold is now pegged at 21-day moving average of $1,693/oz and at $1,700/oz, which also marks the 50% Fibonacci retracement of the July up move.

Precious metals are trading mixed with gold nudging higher. All the metals in the complex gained overnight after European officials unveiled a plan for recapitalizing the region's banks, soothing fears about the spread of sovereign debt problems.

Crude oil
Crude-oil futures broke their five-session streak of gains Wednesday, settling slightly lower on mild trading. Since crude bottomed at just under $75 just a little over a week ago, it went straight up and we had some pretty big moves there.

The market has spent two days now trading around $85 a barrel, after weeks of extraordinary volatility that saw both a one-month high and a one-year low. With crude oil climbing more than $10 a barrel, or 13%, over the last week, the market was absorbing its gains before deciding on its next direction.

Base metals
LME base metals are trading higher on hopes about a plan to recapitalize Europe's ailing banks. However, caution could prevail ahead of Chinese import data for September, due to be released later in the global trading day. Investor sentiment was boosted Wednesday on positive cues from Europe and speculation of restocking in China. LME copper ended up 3.2% at $7,525/ton, and lead ended 4.3% higher at $2,070/ton. Given that Chinese consumers are still suffering from tight credit conditions and a lack of confidence regarding the state of both the domestic Chinese and wider global economy, it is more likely that the restocking has been undertaken by merchants, perhaps looking to a brighter and better 2012.

The U.S. dollar index traded sharply lower Wednesday and hit a fresh three-week low of 77. The dollar index bulls are fading fast and near-term chart damage has been inflicted to suggest the index has put in a near-term market top at 79.8.(The author is Manager, Research; Edelweiss Comtrade Ltd.)


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