Asian Metals Market Update for 14th June 2024

June 14, 2024

Retail traders and the masses need to leave the obsession of near-zero interest rates and negative interest rates. In the past eighteen months, interest rate bets, and changes in the stance of interest rates have been the key drivers for prices and price trends of all asset classes. Commodity exchanges are seeing rising volumes every week and every month as they are directly influenced and immediately influenced by interest rate outlook.

Real inflation will continue to rise, month on month cost of living is seeing a sharp jump worldwide in every nation. Rising expenditure on food costs is the prime reason why our cost of living is rising. Headline inflation does not include a rise in food costs in most nations. Hyper rise in investment allocation based on interest rate bets is one of the key reasons why real inflation is rising or felt inflation is rising. Interest rates trend and the subsequent bets impact all asset classes for a period of twelve months. This is my experience. Long-term financial doomsday will be there if we keep on making investment decisions based on changes in global liquidity or changes in money supply. Gold and only physical gold is the best hedge.

Saudi Arabia has refused to renew the 50-year Petrodollar agreement with the US.

Henry Kissinger in 1974 had brokered a 50 year deal with Saudi that oil trade would be dominated by USD. Saudi was indirectly blackmailed by the USA to sign this agreement, promising in return support against Iran & other Radical nations. Please note that the US Dollar then lost its credibility after Nixon "temporarily" suspended the Gold Standard in August 1971. By making USD a Petrodollar, the US could make it a Global Reserve Currency allowing it to raise indiscriminate debts to Peddle its economic growth.

MY VIEW: This news has been all over the internet for the past two days. The purchasing power of the US Dollar will sink next year. US presidential elections in November will not prevent an imminent crash. Japan, NATO allies, and other nations have huge investments in US treasuries. The bullying power on the USA has not reduced an iota. Trade sanctions making a warzone with your friendly neighbor or meddling in your nation's elections or creating COVID-19, the USA and its NATO allies will continue the dictate the world. Russia, Hungary, China and now Saudi Arabia are trying to shift away from control of the USA and NATO. Gold will continue to rise. The current and all the fall till the end of September (if any) should be used to investment for the long term. Worse case downside price risk is ten percent to twelve percent for gold with infinity as the price target. (I CANNOT CONFIRM THE AUTHENCITY OF THIS NEWS AS IT YET TO BE ON REUTERS NEWS. I RELY SOLELY ON REUTERS NEWS FOR MY FORECAST.)

It will be a technical trade for the next ten days due to the lack of major market-moving US economic data releases. News from the Chinese economy can cause sharp two-way price moves.

Spot Gold – intraday view (current price $2305.20)

Spot gold has to trade over $2290 to rise to $2325.30 and $2347.60 and more.
Crash or sell-off will be there if and only if spot gold trades below $2290 after London opens, in the USA session, and till days close.
A quick rise will also be there if spot gold trades over $2310.00 today.
In case of a rise watch $2310.00. Spot gold can move $35 on either side from $2310.00.

Disclaimer

The investment ideas provided is purely independent view point and are solely for collective learning and for academic interests. There is no commercial benefit accruing or have deemed to accrue to me out of providing such investment ideas.
The investment ideas shared here cannot be construed as investment advice or so. If any reader is acting on these advices, they are requested to apply their prudence and consult their financial advisor before acting on any of the recommendations made here. I am not responsible to anybody in the event of profits and losses (if any) upon acting on such advice.
I hope that our reader is aware about this well aware of the risk involved in trading in commodity derivative trading.

Disclosure: I trade in India's MCX commodity exchange. I have open positions in India's MCX commodity future. I do not trade in CME future or OTC spot gold and spot silver.

NOTES TO THE ABOVE REPORT