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Asian Metals Market Update: Energy price and inflation

Traders were long in gold and silver before the FOMC. FOMC meeting did not have anything new. The end result is a just a correction. Short term bearish trend in gold and silver will be there if they continue to fall till Tuesday. Federal Reserve expects that interest rates will not be changed in the next three years. There were two dissenting members as well. Zero interest rates to negative interest rates for the next three years implies gold prices will reach stratosphere.

It will be a technical trade today. There are US economic data releases today and tomorrow which temporarily impact gold and silver price.

What will affect Gold and silver now post FOMC

  1. Quarter end position squaring and rebuilding.
  2. Traders will also start taking positions for US September nonfarm payrolls. It will be released on 2nd October. September jobs is important as US stimulus cheques expired.
  3. Big Vaccine news. A Vaccine for covid has been factored in by the markets. Only distribution (in 2021) is moving global financial markets.
  4. US presidential election political mudslinging and political drama and political scams.
  5. Energy price and inflation.
  6. Regime change (in USA) risk.

Comparative is the word here

  1. Comparative US economic growth versus Eurozone. UK, China and Japan.
  2. Comparative US inflation versus Eurozone. UK, China and Japan.
  3. Comparative US interest rates versus Eurozone. UK, China and Japan.
  4. Comparative US bond yields versus Eurozone. UK, China and Japan.
  5. Comparative US jobs creation versus Eurozone. UK, China and Japan.
  6. Comparative US covid cases and covid spread versus Eurozone. UK, China and Japan.

The world and global financial markets will be driven by “COMPARISON”. Trade war theme, covid, China and its continued deliberate worsening relations with the rest of the world and all the current bullish factors for gold and silver will continue.

Keep a close watch on Turkey. Erdogan is taking steps for creation of a big Islamic kingdom. Turkey is taking steps to unite all major Islamic nations so that they can function under Islamic laws, sharia laws and a common currency similar to euro. Turkey a very big consumer of gold. Keep a close watch on Turkey and its political plans. Turkey’s relations with Europe is the getting bad with passing of each day. Islam is all about intolerance to other religions. We all know the state of minority Hindus in Pakistan. (just forced conversion).

How to trade in gold and silver post FOMC

Remain on the sidelines today and till Monday. If gold and silver fall today in USA session and close below $1925 tomorrow, then gold ETF will see a surge in outflows next week. Currently sharp falls in gold and silver should be used to invest. This is not a bear trend. Bearish trend will be dependent on Tuesday close.

Crude and copper are a buy on dips strategy.

COMEX SILVER DECEMBER 2020 – current price $2712.50

  • Silver needs to trade over $2670-$2700 zone (till next week) to rise to $2841 and $2935.50.
  • Silver will crash if it trades below $2670 anytime till Monday to $2550 and $2412.

COMEX COPPER DECEMBER 2020 – current price $302.70

  • Copper needs to trade over $297-$301 zone till next week to rise to $312 and $308.
  • Massive crash will be there if copper trades below $297.
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