This is just consolidation phase before the next big one-way price move. Momentum and sentiment is very bullish. There are buyers on dips in gold, silver and copper. Worries over Electricity prices in Europe has started once started. Chinese power supply reduction to Aluminium factories and other industrial metal factories has increased fear of a big knock down in supplies. Chinese demand for industrial metals and global supply trend of base metals will dictate price trend till end October.
Food price inflation is very high in USA. I was reading an article which told that some Americans have started taking debt to meet food expenses. Big recession and lawlessness will be there in USA if working people are unable to meet even basic food expenses. Last month the social media was worried over rising egg price in USA. Federal Reserve and almost central bank will have to raise interest rates for the rest of the year if food price becomes the key indicator for interest rate decision.
Every nation has strategic food reserves. Biden administration can easily sink food price by releasing food from its strategic reserves. Biden does not have the will. All the food prices will crash in USA just before the US Presidential elections. Rising food price can be curbed by reducing exports and focusing on domestic supplies. France and Italy are witnessing a historical heat. Northern India and Eastern India temperatures are over 40C. (whereas it should not be more than 33C.) Southern American nations are also witnessing a draught. Food price rise is here to stay and will only get ferocious over the coming years. No one really knows the economic damage that will be done by global warming.
FOMC meeting is overhyped. Banks are reluctant to lend to small and tiny enterprises. Closure of labor intensive small and tiny enterprises is on the rise once again in USA and worldwide. This is benefiting large corporations. Masses are facing the hyper -inflation bomb due to ever -rising Cartelization, Duopoly and Oligopoly by large corporations. Small and tiny corrections in gold and silver will be followed by an equally big rise.
Day traders and jobbers need to remain on the sidelines till Friday. India’s gold demand will fall from next week. India’s gold demand will be price elastic from next week till end August. Indian’s are waiting for significant price corrections to increase physical gold investment.
Keep close watch on the price spread between Comex gold June future and Comex gold December future.
- GC June ($2015.20)-GC December ($2072.40) spread is a whopping $57.20.
- These are historically high spread.
- Gold price spread has been rising since August 2022. Spread are near historical high.
- Bear trend or sell off will be there
- if GC June-GC December spread narrow to $45 and below before 28th April, then a bear market will start.
- Historical high spread also reflects rising gold investment demand (in futures, options, ETF and physical).
Spot Gold
- Daily support: $1972.00 and $1992.00
- Daily resistance: $2021.70 and $2036.00
- Spot Gold has to trade over $1992 to rise to $2036.00 and $2057.
- Mild sell off will be there is spot gold trades below $1992.00.
Spot Silver:
- Daily Support: $24.45 and $24.90
- Daily Resistance: $25.60 and $26.10
- Spot silver has to trade over $24.80 to rise to $25.90 and $26.39.
- Crash or sell off will be there if spot silver trades below $24.80.
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