Trader’s expectation is for parity towards the euro/usd. Cable/UK Pound sold off yesterday due to a slight political crisis for UK prime minister Boris Johnson. I will prefer to remain on the sidelines today. I was not expecting a big crash yesterday in precious metals and base metals.
I know most of you are long in gold, silver and copper. There are two options (a) Use trailing stop loss below $1742 (gold), $1854.70 or 1881.10 (silver) and $325.00 (copper). (b) Depending on your buy price take steps to minimize your loss. (c) I am not a believer in averaging. (d) Physical stocks holders need not worry. The quicker the fall, the quicker are the chance of a long term bottom formation. I am against panic selling of physical metal unless you need money to business needs. Sell only the minimum to meet the business needs.
Crude oil and natural gas will be very volatile this quarter. They will be caught between reduced recession demand and supply erosion from Russia. Cooler weather (if any) in Europe and USA will reduce short-term demand and temporarily ease supply pressures. The hurricane season in the Gulf of Mexico starts from July and runs till November. Any major category4 hurricane in July to September in the Gulf of Mexico can result in a big $30 rise (from the price prevailing at that time.).
There is speculation that the Biden administration will forgive/write off up to $10,000 in student loans anytime before the US senate elections in early November. If true, this will remove recession fears in the USA. Stocks and base metals will form a long term bottom. One needs to keep a close watch on the student loan forgiveness news apart from interest rate hike news and inflation news.
A lot of short-term investment stop losses will be triggered if gold, silver, and copper prices fall in London and USA both. Remain on the sidelines. Stay away and wait for USA to open and then decide on the trading strategy. There should not be any scope for losses.
FOMC minutes will be impactful only if there is a change in the interest rate hike view. Else it will be a technical trade.
Key US economic data releases today
6th July (Wednesday): ISM non-manufacturing, FOMC minutes
Spot Gold: (current market price $1767.10)
- Key intraday support: $1734.90 and $1753.20
- Key intraday resistance: $1785.90
- Gold has to trade over $1753.20 to rise to $1785.90 and $1804.00.
- Gold will crash only if it trades below $1753.20.
Spot Silver: (current market price $19.17)
- Key intraday supports: $18.25 and $18.77
- Key intraday resistances: $19.70 and 20.22
- Silver has to trade over $18.90-$19.10 to be in an intraday bullish zone and rise to $19.70 and $20.22.
- Silver will crash or plunge if it trades below $18.90 to $18.25 and more.
COMEX COPPER SEPTEMBER 2022 (current market price $336.90)
- Key intraday support: $325.30
- Key intraday resistance: $343.00 and $356.60
- Copper has to trade over $325.30 till next week to rise to $356.60 and $380.00.
- Copper will see another wave of sell-off only if it trades below $325.00.
- I do not expect copper to fall below $300.00 this quarter unless there is a clear indication that Federal Reserve will raise the interest rate in November meeting by 0.75% or stocks continue to plunge till next week.