Asian Metals Market Update for 7th June 2024

Interest rates have been cut by the Bank of Canada and European Central Bank. There is pressure on the Federal Reserve to cut interest rates as early as possible. Bank of England is also expected to cut interest rates in the next two months.

Interest rate cuts initially will be bullish for precious metals and base metals and energies. The pace of rise is important and not the actual rise. The overall trend will be there for gold and silver and copper for the rest of the year.

The number of cryptocurrency exchange-traded funds or crypto ETFs is expected to rise multifold over the coming months. Investment (short-term and long-term) in all kinds of crypto ETFs will rise every week and every month for the next two years. Some asset class has to fall or be in a bearzone if crypto ETF investment zooms for a year. So far gold and silver have not been impacted by rising global interest in crypto ETF and crypto trading. The prime reason is central bank buying and very high physical demand all over Asia (even with a rising price trend). Bubble can be formed in asset classes including precious metals and base metals and energies. The rising price bubble will not happen in the next twelve months. Very little chance.

One still needs to be vigilant even in long-term investment as the so-called “bullish price bubble burst” will come uninformed. I still cannot digest the case of a medium-term bullish outlook in all asset classes. US dollar dumping does not mean a bullish trend in all asset classes. Real inflation and felt inflation (“felt inflation” is the price is the real increase in monthly cost of living. {after taxes and other state payables}). “Felt inflation” is rising in every nation and will not stop. Headline inflation is generally a manipulated statistical tool by states, and central banks to manipulate the minds of the masses. “Bullish price bubble burst” can be there once the US elections are over. There is a limit beyond which a rising debt of an individual/family will cause a sharp decline in consumption which will further increase jobless rate and corporate profits.

I may be writing that gold price will reach $5,000 over the coming years or a copper @20,000 in the next years. You invest aggressively based on this hyper bullish forecast. But IF a medium-term trend or a “bullish price bubble burst” arrives before my target is achieved. You will definitely get nervous and book a huge loss on your investment. This is just an example. Use it for all your investment. Be extra vigilant on your investment for the next two years.

Spot Gold  – intraday view (current price $2386.40)

• Spot gold has to trade over $2364.40 to rise to $2408.70 and $2440.60.
• Mild sell off will be there below $2364.00.

CME Copper July – intraday view (current price $466.50)

• Key price to watch $466.40
• Copper July can rise to $474.30 and $485.50 as long as it trades over $459.80.
• Quick rise will be there if copper July trades over $466.50 after LME open and till days close.

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