From 24th April, View: “The consolidation period will be over in gold and silver and new range will be formed soon. On the higher side, in my view.” This has happened.
I remain bullish on gold and silver in the medium term. However, I would prefer to be on the sidelines as a short-term trader. Use strict stop losses and prefer not to leave any intraday open positions for the next trading day.
China is reopening on 6th May after their summer break, and their silver, copper, and all non-ferrous metals have been galloping. Chinese will be buyers on dips for the rest of the year.
India doubled the import duty on gold and silver. Gold import norms were changed yesterday. This is in line with my expectations. In fact, as soon as USD/INR breached 90.00, I was expecting an increase in customs duty on gold/silver. Import history of gold indicated that official gold imports in India have fallen between three months to five months (after custom duty increase) followed by a very big resurge. There is no FOMO in Indian stock markets. Stock picking is not easy. For the low-risk taker in India, physical gold and physical assets are the safest medium-term investment bet. (other than G-Sec.)
Yes, smuggling in India will increase. India and every country in Asia are focused on day-to-day forex outflows. Capital controls (which were there till 2003) in India can be there in small ways if the Iran war does not end by the end of June. Measures to increase forex inflows could be headlines after every few days.
My worry is that of a recession if the Iran war continues on or after the Third quarter. The world believes in optimism that “This Too Will be Over”. Global stock markets are rising on a single narrative of Artificial Intelligence and nothing else. This narrative lasts for two years, followed by a crash. Crude oil or energy was the narrative between 2004 and 2007, and thereafter crude oil futures slumped. Gold is the best hedge. However, I will be cautious in my short-term silver investment. I will also continue with by monthly physical silver buying.
Asia will raise interest rates to tide over inflation. The USA will pause the interest rate cut. It remains to be seen how the new Federal Reserve chairman deals with Trump, who wants an interest rate cut at any cost amid a rising inflation outlook.
There is no major US economic data release next week. It will be a technical trade. Less profit is better than a loss should be our trading motto.
Spot Silver – Current Market Price $81.41
- 100 day simple MA: $81.42
- 50 day simple MA: $75.64
- VIEW: Spot silver has to trade over $80.70 on daily closing basis today and whole of next week to be in a bullish zone and rise to $86.20, $89.10 and more.
- Mild sell off will be there if spot silver trades below $80.70 after London open and till days close.
- $77.00-$78.20 is the key support in case of a big crash
- Views are intraday unless otherwise specified.
- Low risk traders and low risk takers trading in silver (spot, future and ETF) should preferably be an intraday trader till end June. I expect a big gap open in Asia (Singapore open) every day till end June in spot silver.
- A systematic investment plan (SIP) or monthly SIP (physical or ETF, your choice) is the best way to invest in silver for the low-risk takers.
- Derivative trading in silver is not for the low-risk takers.
- Please asses your own risk profile if you intend to do derivative trade in silver or trade in silver future in any commodity exchange of the world.
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
- ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
- Follow us on Twitter @chintankarnani
- PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
- PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
- THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
- ALL PRICES/QUOTES IN THIS REPORT ARE IN US DOLLAR UNLESS OTHERWISE SPECIFED.
- ALL NEWS IS TAKEN FROM REUTERS NEWSWIRES.
- TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE
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