Today, I will prefer to discuss my view on a few points.
First, interest rate cuts or a move to a near-zero interest rate policy does not necessarily translate into a rising growth period. The common man's interest burden will fall. But the cost of living rises sharply in a falling interest rate period. The price of every essential commodity (which is used/consumed) in our daily lives rises exponentially over a period of time. The rich and the hyper-rich benefit from a falling interest rate cycle. Interest payments are never a major expense of a family’s monthly income. Interest payments are important, but not the sole ones. U.S. President Trump wants the Federal Reserve to cut interest rates aggressively, defying all the theories of modern economic theory. Only Dumb American voters will support him in next year’s US Senate elections. Our wealth reduces on a purchasing power parity basis in a falling interest rate cycle. (unless accompanied by some good investment income.).
Second, inflation in the USA will be below expectations for the rest of the year. How? Postponement of the higher trade tariff of China implies Chinese imports for Thanksgiving and Christmas will reach warehouses in the USA before the trade tariff of China kicks in. Chinese imports play a big role in inflation calculations. Inflation, in my view, will be less troublesome for the Federal Reserve till Thanksgiving. Jobs and other parameters of economic growth will need micro scrutiny.
Third, Physical gold, physical silver, physical copper, or any physical metal cannot be printed. They have limited supplies. IF Every person in the world starts to buy just five grams of physical gold and just one hundred grams of physical silver, then the long-term rise could be something not written anywhere and not dreamed of. The reality is that every person in the world either has purchased gold/silver in the last twelve months and/or intends to do so if and when there is a correction.
Fourth, central banks adding physical silver to their diversification implies that a big parabolic bull run can start anytime. The rise from $25.00 to $39.00 in spot silver was just a trailer of the larger things to come.
Fifth, the US imposing the highest trade tariff is not just about India buying Russian oil. In my view, American companies are facing very tough competition in India. They are not able to buy Indian companies at are low valuation. Domestic Indian business groups in India are buying saleable Indian businesses and not easily letting large American corporations go on a buying spree in India. They are also giving tough competition in the global mergers and acquisitions market to American corporations. India is one of the largest retail markets in the world. India is expected to continue to be the largest retail market for the next decade. India is not Vietnam or Cambodia, where upcoming Trump family resorts are given all kinds of freebies just to be in the lower trade tariff.
Intraday traders and short-term investors should trade in the technical till the release of the US August non-farm payrolls on 5th September. Avoid the “Hurry-Worry” intraday trades. Do not deviate an iota from whatever investing principles you follow.
SPOT SILVER – current price $38.81
- Spot silver has to trade over $38.31 on a daily closing basis till Friday to rise to $40.56, $42.20, and more.
- For spot silver to crash, it needs a daily close below $38.31 for a minimum of five trading sessions.
- There can be some very sharp two-way price moves.
- Views are intraday.
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
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- 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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