Quarter-end position squaring and rebuilding will start from today and continue for the next two weeks. Gold and silver are holding key short-term supports. Copper and nickel are being bogged down by negative news from the Chinese property sector. The third quarter will be a battle between short-term bears and long-term bulls.
Profitable short-term traders will be those who are able to gauge the pace of rise and pace of fall. Panic trading and panic investing will need to be avoided in the third quarter. How? An unexpected Chinese stimulus (if any) can start another wave of rise for copper. We all will trade the momentum after this news and go long in the copper future. But if the same is accompanied by a sell-off in US stock markets (in the evening or night for Asia) then buy stop losses will be triggered in the copper trade. A bullish news followed by equally bearish news within a few hours or a few days or vice-versa will happen frequently in the third quarter. You have to do all to avoid frequent triggering of stop losses.
Long-term bullish fundamentals is known by all. De-dollarization for gold and silver. Electric vehicle demand and renewable energy demand for copper and base metals will be key themes for the next five years. We need short-term profits as well. Long-term buy and forget has to be a part of your investment portfolio but not all.
Trade in the technical. Keep a close watch on the key supports in case of a panic. Crash or a short-term sell-off will be there only if there is a sustained fall below key technical support.
I am discussing the behavioural aspect of trading as the next key US economic data release is on 28th June with US May Core PCE inflation number. The economic data vacuum is there for the next eight trading sessions.
Spot Gold – intraday view (current price $2321.40)
- Spot gold has to trade over $2310 to rise to $2347.70 and $2374.60.
- Crash or sell off will be there if and only if spot gold trades below $2310 after London opens, in USA session and till days close.
- Very quick rise will be there if spot gold breaks and trade over $2330 after London opens and till days close.
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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