Asian Metals Market Update for 26th September

Trader’s focus is on the impact of Chinese stimulus on Chinese economy, Chinese demand. Optimism is there. Optimism is also there for more economic stimulus by China over the coming weeks. The only worry is (i) Whether results will be immediate or delayed. Copper and base metals and silver should be bullish to firm trend. There can be sharp one percent correction but overall trend is bullish.

China to give one-off handouts to needy

• China will distribute a one-time allowance to disadvantaged people ahead of a national holiday next week.
• The value of the handouts was unspecified.
• The plan will put cash in the hands of extremely poor people, orphans and those in difficulty.
• The allowances are to be paid before October 1 when China begins a week-long public holiday to mark the 75th year of the founding of the People's Republic of China, the government said.

Global economic growth outlook is very bullish for Asia this year and next year. If Chinese economy starts to recover, then copper and base metals and silver just might see a historical rise in the next nine months. However I will still prefer to use wait for the next two weeks, see the trend and be gung-ho on the super bullish trend in copper, base metals and silver. I will also prefer to use all the knee jerk price crashes (if any) in the next two weeks to reinvest.

IN MY VIEW GOLD HAS A

• $100+ premium due to uncertainty of US Presidential election result.
• $50+ premium due to continued escalation of conflict between Israel and Hamas and Hezbollah.
• $100+ premium on expectation that the Federal Reserve will cut interest rates of 0.75% and more in the final two meetings of the year.

There will be a sharp correction (not a bearish trend) if and when any of the above factor is not there. In case US September nonfarm payrolls (on 4th October) comes in at or below 70,000 along with a rise in unemployment rate, then chance of a 0.50% interest rate cut will be very in November meeting of Federal Reserve. NFP next week will be a very big one before the US presidential elections. After NFP there is no major US economic data release till end October or Halloween.

Key US economic data releases will start from tomorrow and continue till 4th October. There may be big small corrections anytime before 4th October. I do not see a bearish trend unless US economic data releases show lack of slowdown or zero chance of soft landing.

Spot Gold – Current Market price $2662.40

• TODAY VIEW: Spot gold needs to trade over $2646.40 to rise to $2685.10, $2716.40 and more.
• Mild sell off will be there if spot gold trades below $2646.40 with $2628.60 as key support till tomorrow.

(the above is an intraday view)

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

1. ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
2. Follow us on Twitter @chintankarnani
3. PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
4. PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
5. THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
6. ALL PRICES/QUOTES IN THIS REPORT ARE IN US DOLLAR UNLESS OTHERWISE SPECIFED.
7. ALL NEWS IS TAKEN  FROM REUTERS NEWSWIRES.
8. TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE