Asian Metals Market Update for 2nd August 2023

Fitch has downgraded the US government’s top credit rating. Fitch downgraded the United States to AA+ from AAA citing fiscal deterioration over the next three years. Fitch repeated down the wire debt ceiling negotiations that threaten the government’s ability to pay its bulls. With this downgrade, Fitch has become the second major rating agency after S&P to strip the USA of its triple A rating.

Impact/My View: Gold and silver are a buy on crash strategy for the rest of the year. Copper and base metals will be very volatile. Sharp rise in the US dollar index should be used to go short with higher trailing stop loss. Rather investing in naked put options or selling naked call options for March 2023 will be a safer investment strategy.

Day traders, jobbers and weekly traders have to remain on the sidelines. Short term volatility will be very high.

U.S. manufacturing appeared to have stabilized at weaker levels in July amid a gradual improvement in new orders, while a survey showed factory employment dropped to a three-year low, suggesting that layoffs were accelerating. U.S. job openings fell to the lowest level in more than two years in June. Job openings, a measure of labor demand, dropped 34,000 to 9.582 million on the last day of June, the lowest level since April 2021, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report.

China's manufacturing activity dropped for a fourth consecutive month in July, with the official Purchasing Managers' Index (PMI) coming in at 49.3, below the 50 level that separates expansion from contraction. The PMI was slightly higher from 49.0 in June, but has now been below 50 for the past three months in a worrying sign that negative sentiment is becoming entrenched in the world's second-biggest economy.

My View: Copper and base metals are firm on expectation that a massive stimulus can be announced by China anytime in the next two months. Global Christmas and New Year expending will exceed most expectation. Crash or another wave of sell off can be there in copper and base metals if China does not announce economic stimulus measures in the next six weeks.

Wider Range trade in gold and silver and copper can continue for a long time than most of us expect. US July nonfarm payrolls will be trend changing only if the number comes in below 125,000 or over 3,00,000. In between, it will be a technical trade for precious metals and base metals.

COMEX GOLD DECEMBER 2023 (Current Market Price $1997.50)

• Key price to watch: $1979.50
• Gold December has to trade over $1973.90 to be in an intraday bullish zone and rise to $2000.70 and $2012.60.
• There will be a technical breakdown only if comex gold trades below $1973.90 after London PM Fix.
• All the price crash (if any) till London PM Fix should be used to go long with higher trailing stop loss.

COMEX SILVER SEPTEMBER 2023

• Key price to watch: $2423.00
• Silver September has to trade over $2423.00 to be in a bullish zone and rise to $2481 and $2550
• There will be another wave of sell off if silver September trades below $2423.00 today.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of Chintan Karnani. In no event shall I have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of mine and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading.

Disclosure: I do not trade/invest in spot gold and spot silver and even in comex future.

NOTES TO THE ABOVE REPORT

1. ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
2. Follow me 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.