Overall trend is bullish for gold, silver and copper. March lowest price is the key support or lower base price for the rest of the year for precious metals and non-ferrous metals. WTI/Nymex crude oil future did not break $130-$140. Near dated WTI/Nymex crude oil future could trade in $80-$130 wider range for the rest of the year, in case strait of Hormuz gets converted into Afghanistan after two weeks. Crude oil trading volumes will continue to see rising trading volumes for the next two quarters.
In my previous “Asian metals market update” column this year, I had written that gold and silver have a history of a big crash in March-April and that it should be used to invest for the long term. April is not yet over, but I maintain my view. In the technical charts double bottom was formed (in spot gold and spot silver) near the March lowest price.
Economic impact is being assessed on the Iran War front and the subsequent path to pre-Iran war recovery. Lots of internal assessment is being done by every country. Long term security measures will be taken to reduce (i) reliance from middle east countries and the persian guld (ii) Reduce dependence on USA as a reliable trading partner.
US dollar is a sinking ship after the Iran war. US dollar index may rise but more and more traders and everyone want to increase trading without the US dollar as a medium of exchange. Bilateral trade with increase significantly among immediate neighbours. For example ASEAN economic bloc will see a big increase in trade among the bloc members as a way to reduce reliance on USA and NATO.
Some of the key fall out of the Iran war are:
Big increase in strategic reserves of energies, precious metals, non-ferrous metals and soft commodities.
Key producing nations (of every commodity) will export less and will prioritize internal home demand over exports.
Recycling will attract huge PE money along with government incentives. For example plastic price will not fall below last year’s lowest price. Recyclers know the lowest base price which they can get in case of volatility.
Nations will do review their SWOT analysis (Strength Weakness Opportunities and Threats) and start making necessary long term preparations. For example India makes very less shipping containers. This could be an export threat. Indian government will take steps to increase shipping containers as part of Iran war restructuring. This is just a one-off example there are hundred for a diversified country like India.
Gold reserves of central banks will increase irrespective of the price rise. France spoofed USA by selling the gold in vaults held in USA and subsequently buying the same quantity in open physical market. Other nations will resort to similar tactic for gold stored in UK vaults and vaults in USA.
Gold backed Chinese Yuan will get started and will see a big increase in global trade. Chinese yuan will not replace the greenback. But will see increase acceptance.
Central banks usage of crypto currencies for global trade can start anytime.
I was asked if there is an inverse-correlation between crude oil price and gold. Some trader are selling gold (CME futures) and buying crude oil futures (WTI) depending on the ratio and the trend. My view is to be in intraday trader on crudeoil/gold ratio trades.
Intraday traders trade very carefully. One needs to be very careful.
Spot Silver – Current Market Price $73.95
100 day simple MA: $80.50
200 day simple MA: $79.10
TODAY VIEW: Spot silver has to trade over $72.00 to be in an intraday bullish zone and rise to $79.10 and more.
Crash or sell off will be there if and only if spot silver trades below $72.00 for eight hours consecutively with $69.40 as key short term support.
There will be very sharp two way prices. Intraday traders need to use strict higher trailing stop loss.
Views are intraday unless otherwise specified.
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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