The number of bullish factors far, far, and far outstrip bearish factors for gold and silver (for an investment period of six months or more). Central bank buying will be non-stop. Physical demand for copper, silver, and non-ferrous metals will be near available supplies and/or a supply deficit. Pace of rise will vary. Volatility will be on the higher side. There is a good profit-making opportunity for intraday traders and long-term investors in precious metals and non-ferrous metals.
Once the Iran gets over and crude oil supplies stabilize, the first things which is happen is an interest rate-cutting spree by the Federal Reserve and most central banks. Under the current circumstances, two 0.25% interest rate hikes by the Federal Reserve (if any) will be accompanied by eight 0.25% interest rate cuts over the coming months. However, this view will be useless if Nymex/WTI crude oil price trades over $115.00 for a few weeks to a few months due to whatever reason.
If you cannot invest in gold futures or physical gold, then buy naked quarterly CME call options (higher strike price with low premium if possible). It is like a zero-hero trade but based on fundamentals. CME gold one once future is getting very good volumes. The loss is limited to the strike price.
If you are ready to bear the strike price loss, then only think of this trade. Global market sentiment is changing every day. Loss-bearing capacity is falling every day as well. Do not treat gold as a casino, as most are still doing. Take this as a caution note or disclaimer.
The Federal Reserve meeting is over. US economic data releases point to sustained stronger growth. It is just back to square one: bond yields and crude oil prices.
Traders will take the Federal Reserve chairman, Warsh, seriously after the interest rate hike. Trump's orders will not be followed by the Federal Reserve chairman. Good for the masses.
There is no major US economic data release for the next seven days. It will be a technical trade, with crude oil price as the key factor.
Gold, silver, and copper traders (intraday and short term), the pace of rise is unpredictable till the first week of November or till the US senate elections result are announced. Use a strict trailing stop-loss. Avoid compulsive intraday trading till the first week of November. The usual stuff, but still reminding you.
Spot Silver – Current Market Price $66.27
- 50 day simple MA: $63.93
- 100 day simple MA: $64.27
- 200 day simple MA: $71.98
- Key intraday resistance: $68.02
- Key intraday support: 644.11 and $65.08
- TODAY: Spot silver has to trade above $65.76 to continue its rise and target $68.90 and more.
- Immediate support is around $65.76. Sellers will be there if spot silver trades below $65.76 today, both in London and Newyork.
- A daily close below $63.00 for five consecutive trading sessions is needed for a short-term bearish phase.
- Spot silver will also crash if it does not break the two-hundred-day simple moving average around $71.98 in the next sixty days.
- Views are intraday unless otherwise specified.
- Currently, silver volatility is very high. Avoid extreme risk-taking while doing intraday trades in silver.
- Low-risk traders and low-risk takers trading in silver (spot, future and ETF) should preferably be intraday traders.
- 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 assess your own risk profile if you intend to do derivative trading in silver or trade in silver futures on any commodity exchange of the world.
DISCLAIMER: The investment ideas provided is purely an independent viewpoint and are solely for collective learning and for academic interests. There is no commercial benefit accruing or 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 this advice, 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 futures. I do not trade in CME futures 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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