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Asian Metals Market Update: FOMC in Focus

Most of the traders are long in spot gold on the belief that gold prices will not fall below $1900. Buy stop losses will be triggered only if gold prices fall below $1900 for the rest of the month.

Gold and silver are firm before the FOMC. Technically they are bullish. Uncertainty is there on vaccines, US presidential elections, among other set of short term and long term positive factors. Sharp correction in gold and silver (post press conference of Federal Reserve chairman) will be there if US ten year bond yields rise sharply.

Initial fall in gold and silver (post FOMC) will be met by investors and physical buyers. Bank of japan meeting, Bank of England meeting (in light of brexit issues) can cause greater short term volatility. People will exit gold ETF and go short in gold futures only if there is clear indication that gold prices will trade with a falling bias for week to a fortnight.

If the Federal Reserve does not say anything new on US economy, inflation or money supply then gold, silver will fall first, the US dollar Index will rise, US stock futures will also rise.

Chinese copper premiums and Chinese nickel premiums from next week will decide the trend of industrial metals. China has a holiday from 1st week of October. Industrial raw materials to meet Christmas demand and New Year demand are generally purchased in September or by early October by Chinese factories. Chinese demand for industrial metals from next week is the key. Technically copper and Nickel are very bullish. LME copper spot faces key resistance at $6944.60. A sustained break of $6944.60 will pave the way for $7511 in the short term. Cautious optimism in copper and industrial metals till Monday. 

COMEX GOLD DECEMBER 2020 – current price $1966.40

  • Gold needs to trade over $1945 (till tomorrow) to rise to 2011.90.
  • Sellers will be there below $1945 and crash will be there only if gold trades below $1932.90.
  • Bearish view (just in case) Massive crash will be there in case gold does not break $1996.20 by tomorrow close.

NYMEX CRUDE OIL (October)  - current price $38.80

  • Crude oil needs to trade over $35.60 for the next three weeks to rise to $41.05 and $43.00.
  • Crash or sell off will be there only if crude oil trades below $35.60 in the short term.
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