Momentum is bullish for gold and silver. Traders will either be long for the extra long weekend or book a profit. I do not see significant short positions for next week. US August unemployment rates need to see a fall (on 5th September) for any meaningful fall in gold and silver. No one will really believe that headline nonfarm payrolls after last month's fiasco.
China is the winner in the Trump-imposed global trade tariff war. India-China trade relations went downhill after the Galwan military clashes in the Himalayas. There were all kinds of entry barriers imposed on Chinese companies for operating in India. Now, all these barriers are being opened to allow Chinese companies to dump their goods in India. (Yeah, I believe that for China, India is just a dumping ground for low-cost manufactured products and nothing else.). India-China trade deficit should more than double in the next twelve months. Chinese leadership is taking advantage of Trump's tariffs to unite Asia. A crisis is always an opportunity. Chinese leadership is maximising this universal trade tariff crisis. August is the “Et To Brutae” moment for the USA under Trump's leadership.
I am expecting India to raise two percent and more, customs duty on gold imports and silver imports due to the highest trade tariff by the USA. I cannot predict the timing, but I expect it to happen. India needs to curtail forex outflows. India has nine months of import cover, which is sufficient, but with threats of long-term dangers. Increasing customs duty on gold imports and silver imports is low hanging ways to curb unnecessary forex outflows. (Assumption: this view is based that the highest trade tariff will not be reduced by the Trump administration.)
India’s Hindu festive season jewellery demand will start from around 24th September and will be there till 23rd October. Indian festive gold jewellery demand will be a damn squib, if the price continues to rise. Only silver jewellery will see a big rise in the upcoming month-long festive season in India. (even if the silver price rises over fifteen percent in the next six weeks). Gold price needs to consolidate or fall by more than five percent for gold jewellery demand to be good in the upcoming festive season in India.
Interest rate cut expectation and the September Federal Reserve meeting is getting overhyped. The Federal Reserve meeting is still more than two weeks away. Over-hyper makes no use of cautions in all my short-term investments.
SPOT SILVER – current price $38.83
- Spot silver is bullish as long as it trades over $38.45 today, with $39.59, $40.06 and $41.56 as price crashes.
- A crash or sell-off will be there if spot silver trades below $38.45 for a minimum of eight consecutive hours today and Monday.
- Spot silver will also crash if it does not break $40.06 in the next two weeks. (This is just a technical view.)
- 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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