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Asian Metals Market Update: Federal Reserve meetings will increase volatility

Everyone is concerned on the trend after the Federal Reserve meeting in precious metals, base metals, and energies. Do not worry. Make trading simple. (1) Use a buy on crash strategy as long as they trade over $1620 (gold), $18.20 (silver), and $3.20 (copper). (2) Crash or sell off will be there in case key resistances are not broken by Friday close. Key resistances are $1705 (spot gold), $19.90 (spot silver) and $3.60 (copper).

Spot gold will zoom if it trades over $1690 after FOMC and on Thursday and Friday. Spot silver will zoom if it trades over $19.90 after FOMC and on Thursday and Friday.

Bets on quantum of interest rate hike in November and December Federal Reserve meetings will increase volatility in precious metals and base metals. If the Federal Reserve once again makes interest rate hikes dependent on data, then I will bet on a 0.25% to 0.50% hike in November followed by a pause. US economy will show signs of slowing from the month of September till the first quarter of next year.

US president Biden is using the Asian political way to win the US senate elections. Asian political way is (i) Loan write off for a certain section of the society just before the voting day. (ii) Freebies and tax reduction for the masses (which never reaches the masses) among others. Such news and announcements (if any) will impact all asset classes. Freebies announcements (if any) will prevent inflation from falling.

Spot Gold:

  • Key intraday support: $1653.00 and $1665.00
  • Key intraday resistance: $1686.40
  • Spot gold can rise to $1698 and $1720 as long as it trades over $1658.00.
  • There will be sell off only if gold trades below $1658.

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