Date:04/01/2007 URL: http://www.thehindubusinessline.com/2007/01/04/stories/2007010400421200.htm

Back Seasonal trends point to upside for crude, silver

G. Chandrashekhar

Mumbai , Jan. 3

From the point of seasonal trends, while stock markets traditionally do well at the onset of the New Year, commodity markets have performed well over the past four years in January.

But the positive CRB index masks a more polarised view, according to experts studying seasonal trends.

January has been a good month for aluminium and silver, while it is the worst month of the year for natural gas and negative for copper.

Hangover

After months of outperformance, natural gas usually suffers a hangover in the New Year.

The odds of an advance are rated at 40 per cent and a high negative return. On the other hand, WTI crude (spot) has the best odds (65 per cent) of an advance and is on a 4-year positive streak, experts asserted.

Aluminium, copper

For silver (spot), odds of an advance are rated at 64 per cent, with maximum returns as high as 75 per cent and minimum at minus 10 per cent.

There is a 53-per cent chance that aluminium would advance and 45 per cent for copper.

For gold, odds of an advance are rated at 49 per cent with 27.5 per cent maximum returns and minimum in the negative territory (-14.1 per cent).

Technical analysts point out that gold remains in a range ($650-613 an ounce) within a large range of $720-520/oz.

This could be masking an underlying bullish trend, they say.

In the short-term, the market could test and pause near $650/oz resistance (previous high).

Ultimately, however, there could be continued gains towards the key $675 area.

Short-term support lies near $635/631, but back below trendline support near $620 is needed to damage the upside potential, a London-based chartist said.