Retail traders are trading and investing heavily in commodities. (precious metals, base metals, energies, and soft commodities.). In my view, retail traders, in general globally, do not have more than ten percent in commodity investment. (intraday, short term, and long term.). (I may be wrong. But this is my view. I expect the retail investment to steadily increase investment in commodities to steadily increase by over twenty-five percent and more over the coming months and years. Huge money are coming to commodities and will come to commodities. A boom-bust type price move should see a longer time frame. Higher periods of a higher bullish phase. Higher period of bearish phase.
Information overload in social media and mobile phones is there. Everyone knows the standard technical indicators like simple moving average, RSI levels, MACD, etc. We need to think beyond standard technical to make trading and investment decisions.
Exchanges like LSEG, NYSE, Nasdaq, CBOE, and LME are all planning to extend trading hours or go 24/7 as retail smartphone trading surges. Everyone wants to capture higher volume. Large traders and hedge funds are using arbitrage between various commodities exchanges to make a profit. The common retail traders’ trades are in a single exchange. Unexpected price moves happen when the inter-commodity exchange hedge happens or de-hedging happens. Algo Ratio trading is also giving big volumes to commodity exchanges. All I am trying to convey is that news and technicals are not the price movers. Inter-commodity exchange hedges and algorithm-based inter-commodity ratio trades also impact volumes, open interest, and price moves. (By the way, on Monday, 21st July, there was a very good spread intraday trading opportunity between MCX silver 30kg September future and MCX silver 1kg August future. One should also look to capitalize such spread gaps if and when they arise.)
One needs to trade and invest very carefully in commodities in general for the next twelve months. The Herd is hyper bullish in precious metals, cryptocurrencies, and non-ferrous metals. News media and social media are hyper bullish. Even I am bullish. But I will be cautious and look for signs of pullback, small corrections, and even short-term bearish phases for the rest of the year.
The Federal Reserve will cut interest rates next week if it succumbs to Team Trump's pressure. More and more Federal Reserve speakers are saying of near interest rate cuts. Trump also wants to overhaul the Federal Reserve. Social Media has exposed Trump and his intentions to control everything on earth.
Cryptocurrencies are not an alternative to the US dollar. Cryptocurrencies' increased usage implies that central banks' monetary policy changes will have a zero impact on global financial markets. It is high time when central banks to clear their stance on cryptocurrencies vis-à-vis paper currencies.
U.S. President Donald Trump will try and force nations to adopt cryptocurrencies. As it is, I am seeing a huge cryptocurrency trading in rural India. Massive rural Indian savings money is going to short-term cryptocurrency trading every day.
COMEX GOLD DECEMBER – current price $3498.90
- The trend is bullish.
- Immediate resistance for gold in December is around $3514.30. Gold December needs to break and trade over this zone to rise to $3565.00, $3604.60, and $3628.90
- Overall, gold for December needs to trade over $3462.00 on a daily closing basis to be in a bullish zone till Friday.
- There will be some very sharp two-way price moves.
- Views are intraday, unless otherwise specified.
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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