Asian Metals Market Update for 5th June 2024

June 05, 2024

India’s surprise in election results will have a zero impact on the demand for gold and silver. Indians will continue to buy/invest in gold and silver in any form on major price corrections. In fact, I expect a better-than-expected demand as near political uncertainty will force people to increase allocation to gold and silver. USD/INR will trade with a weaker bias versus the US dollar.

A coalition rule in India can result in lower taxes, maybe even a reduction in GST on jewellery sales or a reduction in import duty of gold and silver. Fiscal prudence will evaporate for the next five years. India’s fiscal deficit will see a sharp rise in the next five years. My only worry is an unstable coalition. India’s expected growth rate should slow down. The corporate hiring freeze could be longer than expected. The unemployment rate in India will increase for the next few quarters. Indian stock markets will see a reduction in the pace of rise. The long-term growth story is intact for India. Businesses in India have adapted and grown irrespective of the political party ruling India.

Federal Reserve meeting is the key next week. A sharp decline in the US May unemployment rate can also force an interest rate cut next week. One needs to sit on cash. Be a fence sitter. Be a short-term opportunist. Use the high volatility to make some quick buck with strict trailing stop loss. "No trailing stop loss, No Trade" should be the mantra.

Spot Gold – intraday view (current price $2336.70)

Spot gold will break free from $2310-$2370 range and form a new range by Monday.
Mild sell off will be there below $2317.00.
Crash Point is at $2310.00.

CME Copper July – intraday view (current price $454.40)

Copper July has to trade over $446.80 to rise to $465.40 and more.
In case falling trend is there between 1:00 pm and 9:00 pm Indian Time, then another wave of sell off will be there on a sustained fall below $451.20

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