Dedication of today’s “Asian Metals Market Update” to George Allan Bloom of Texas USA. He has been my oldest reader of my “Asian Metals Market Update”. He has been communication with me regularly since 2006. George Bloom has some cardiac issue along with a kidney failure. God gives him good health. I hope recovers quickly.
The next thirty days. Big Time. Big Moves.
Precious metals, base metals and forex markets have a big thirty days ahead. HOW?
16th November to 28th November: There are no major US economic data release. (it will be a technical trade in all asset class in this period.)
29th November to 15th December: PCE numbers for October, November jobs, ISM manufacturing, and ISM Non-Manufacturing for November, CPI and PPI for November, and FOMC.
All these numbers if they come in on the lower side of expectation will increase bets for an early interest rate cut. The multiplier effect could a crash in US dollar index, sell off in bond yields. Precious metals and base metals starting another wave of rise.
But a higher number or an indication of a recession ( as opposed to the current view of a soft landing) will cause sell off in base metals, stocks and crude oil. Bonds and US dollar Index will be very volatile.
How do we trade and invest in the next thirty days?
Day traders: Buy or sell only on intraday technical breakout and technical breakdown. Use trailing stop loss. Do not roll over open position to next trading just because it was a loss.
Short term traders; Use trailing stop loss on your buying positions in gold, silver, copper and base metals. Use any significant rise to close long positions in crude oil.
Investors with investing period of twelve month and over: Use significant crash in gold, silver and copper to increase investment.
US November jobs, November unemployment number is the key.
Cyclical employment or temporary hiring will be on the higher side in the USA due to Black Friday Sale and pre-Christmas sale. A November nonfarm payrolls below 140,000 is needed plus a rise in unemployment rate (over four percent) is needed for the greenback to plunge. The multiplier effect is known to everyone.
Only a big surge in inflation will cause a continued rise in US bond yields.
Spot Silver: (current market price $23.87) – THIRTY DAY VIEW
- Support for the next 30 days: $20.35, $21.55, $21.71 and $22.58
- Resistance for the next 30 days: $23.86, $24.32 and $25.61
- Spot silver should break free from $21.00-$25.00 trading range and form a new trading range in the next thirty days.
- Spot silver has to trade over $22.20 to try and rise to $25.61 and $26.56 and $28.859
- Crash or sell off will be there if spot silver does not break and trade over $25.19 in the next thirty days to $21.71 and more.
- I will prefer to use any significant crash of more than $1.50 to invest with a price target of $26.17 and a stop loss below $21.50.
Traders' sentiment is very bullish for precious metals and base metals for the next thirty days or till the December meeting of the Federal Reserve. Bullish View needs caution due to once bitten twice shy fears. Gold has not been able to trade over $2000 for a very long time. Hence the caution in gold. Silver has not been able to trade over $25.00 for a long time. Hence the caution in silver. LME Copper spot has not been able to trade over $8400 for a long time on or from August 2023. Hence the caution for copper as well.
Traders are betting for interest rate cuts next year. Federal Reserve officials are trying to pour cold water on the timing of interest rate cut next year. Tug-o-war on interest rates can cause super-high volatility.
Technical trend on the closing price of 19th December should continue till 26th January.
US Dollar Index will crash or see a medium term technical breakdown if there is a sustained fall below one hundred week moving average of 103.50 to 98.80. A daily close below 103.50 for seven consecutive sessions will put an end to any kind of hopes of a rally in the greenback.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views Chintan Karnani. In no event shall I have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of the author and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Prepared by Chintan Karnani
Disclosure: I trade in India’s MCX commodity exchange in metals and energies. I have open positions.
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