Trend after the release of US December core PCE inflation number at 7:00 pm Indian Time is the key. Traders will start taking positions for next week's over hyped Federal Reserve meeting. In my view the Federal Reserve will not be direct/clear on March interest rate cut. Their focus will be on May interest rate cut.
A fall in US Q4 Core PCE inflation number implies that interest rates should be cut in March. However, it seems that the Federal Reserve will not cut interest rates unless there is a slowdown in US economy. US December durable good numbers and other numbers indicates a strong US economy with chance of a mild slowdown.
Rising crude oil price (due to Red Sea tensions) could be a worry for those betting on aggressive interest rate cuts this year. Energy price will be the “X factor” which determines the quantum of interest rate cut. At the end of the day, this year is really about quantum of interest rate cut central bankers and not the actual cut. Flip-flops, volatility, great intraday trading opportunities will there due to interest rate cut positioning and repositioning. Traders are making hyper one-way bets on hype and herd.
At the end of the year gold, silver and copper will close much higher than the current price. There is not an iota of doubt over the same. The question is getting the right the pace of rise, the period of price consolidation and visioning the non-recurring factors.
IS BUYING PHYSICAL GOLD AND SILVER IN ELECTRONIC FORM BETTER THAN BUYING IN PHYSICAL FORM?
A close relative son was last month. I asked him to buy a ten-gram silver coin every month (irrespective of the silver price and silver price trend.) for his child as a part of the diversified investment strategy. His initial reaction was “Can I buy physical silver in electronic form”. I just cannot store the physical silver in my home. This is the case with most of the current young generation of people. They want to invest everything in electronic form.
I am a trader and investor of equity shares. Last year, one my equity shares were written off. I came to know only a few weeks after the stock write off was made. The point I am trying to make, is that we do not own anything which is made in electronic form. The government, regulatory authorities or the people in power can write off or take away anything in electronic form. This will include physical gold or physical silver brought in electronic form.
We need to have a bank locker and a safe locker in our house so that we can store it and use it in times of need. Everything invested in electronic form will look safe for the next few years. Unsafe period or political cabal looting our investment will be there after say five years. I am not investing in physical gold and physical silver for a year or two. I am investing as a part of diversification for my retirement planning or to meet certain big expense like my child’s college education.
TODAY
As a day trader I will prefer to be on the sidelines in gold and copper. I will use a buy on crash strategy in silver for next week. Copper has yet to show signs of a sustained rise over $8600 (LME cash) in the last four months. Hence the cautious optimism.
COMEX GOLD APRIL 2024 (current market price $2041.30)
- Key price to watch: $2045.10
- Gold April has to trade over $2031.10 today and Monday to rise to $2058.50 and $2075.00 and more.
- Sell off will be there only if comex gold April trades below $2031.10 after 7:00 pm Indian Time and till days close.
COMEX SILVER MARCH 2024 (current market price $2300.50)
- Key price to watch: $2315.00
- Silver March can rise to $2372.60 and $2402.00 as long as it trades over $2275.00
- Mild sell off will be there if silver March trades below $2275.00 today.
PLATIMUM CME APRIL FUTURE (current market price $900.30)
- Daily support: $884.80
- Daily resistance: $904.10 and $914.90
- Platinum April future has to trade over $894.00 to be in an intraday bullish zone and rise to $911.90, $922.80 and more.
- Mild sell off will be there if Platinum April future trades below $894.00.
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