The market is still betting on March interest rate cut it seems. There is a zero percent chance of March interest rate cut. May interest rate cut will be there only if there is a slowdown in US jobs hiring. I will not be surprised if the yen breaks and trades over 152.00 versus the US dollar for a few weeks. Japan is happy with a weaker yen. It will be difficult for spot gold to break $2100 before the end of the month. Consolidation period can continue for a much longer period than most of us expect.
Another out-of-the-box reason why the Federal Reserve is happy with a delayed interest rate is that the USA is seeing massive inflows (in all asset classes) from mainland China, Chinese people. Owing to a historical stock market crash in Chinese stock markets, Chinese people are investing very aggressively in assets in Japan and USA. Federal Reserve and Bank of Japan are all delaying their interest rate cuts/hikes thanks to China. Once there is a reverse flow from the USA to China and Japan to China, the Federal Reserve will start to cut aggressively. Bank of Japan will start its long-term series of interest rate hike.
In five weeks’ time, the winter season will be over in the USA and Europe officially. Volatility will be very high in the next five weeks. Long-term bottom signs will need to be looked in silver, copper, zinc and aluminium (in the next five weeks if price continues to fall). As long as crude oil trades over $67.00, downside risk will be limited or medium-term bullish trend is intact. Asian summer driving season will start from the middle of March and continue till the middle of July.
Indonesia’s presidential election this month if there are surprises will only impact global nickel price and no other asset class. Global nickel prices are subdued or have traded with a falling trend (for the past twelve months) thanks to big spurt in supplies of various industry-usable forms of nickel. I warn that nickel prices cannot continue to trade with a falling trend. They will form a long-term bottom before of end of the third quarter. Overall, I am bullish on base metals prices in general on or from the second quarter of the year.
Spot Gold (current market price $2031.10)
- Daily support: $2015.50 and $2023.60
- Daily resistance: 2049.90 and $2057.60
- Spot gold has to trade over $2030.00 to rise to $2057.60 and $2064.10.
- Sell off will be there if spot gold trade below $2030 after London opens and till days close.
Spot Silver: (current market price $22.52)
- Daily Support: $22.22 and $22.46
- Daily Resistance: $22.89 and $23.13
- Spot silver can fall to $22.22 and $21.77 as long as it trades below $22.90.
- Intraday bullish trend if and only if spot silver breaks and trades over $22.90.
PLATIMUM CME APRIL FUTURE (current market price $901.30)
- Daily support: $889.40
- Daily resistance: $920.30 and $932.40
- Platinum April future has to trade over $889-$894 zone till Wednesday to rise to $932.40 and more.
- Crash or sell off will be there if there is a sustained fall below $889-$894 zone.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views o the individual analyst, In no event shall Insignia Consultants or its employees 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 the author and should not be consider7ed as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Prepared by Chintan Karnani Website www.insigniaconsultants.in.
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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NOTES TO THE ABOVE REPORT
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