Bloomberg and other American media houses have said that a war has been started in Ukraine. They later deleted these posts. US president has said that war with Ukraine is imminent. French President has gone to Russia in a last-minute attempt to prevent a war with Russia. Safe-haven demand will rise. Gold and silver are safe havens.
Crude oil reached $93.00 last week. Traders are expecting that crude oil prices will break $100 and will trade over $100 for a very long period of time. High probability of an armed conflict between NATO and Russia has resulted in crude prices rising every week. Opec has really done nothing to ensure that crude oil price falls. Opec and major crude oil-producing nations are indirectly happy with higher crude oil price rise. They know that crude oil demand will rise at a very rapid pace this year and next year. Higher gasoline price and higher energy price à rising inflation à public unrest à central banks raising interest faster than market expectations.
The real problem that is since 2000 central banks have just relied on expansion/contraction of the money supply to address economic issues and inflation issues. Protection was given to so-called “too big too fail” large corporations and large banks. China was made factory of the world just to reduce cost. Everything was imported. The covid situation has changed everything. Corporations have increased inventories substantially but failed in it. Port congestions and lack of locally produced goods is the real reason why inflation is rising in every nation. Now post covid period every nation is trying to give incentives or using protection measures to increase local production. Decades of rotten economic policies by so-called G7 nations can be overturned overnight. It will take years if not decades for G7 nations to increase reduce imports or increase local production. Real inflation is here to stay. Statistical inflation numbers will be fudged to justify central banks action and inaction. Irrespective of anything the overall trend is bullish for gold for the rest of this decade. There will be phases of negative return. If the gold price is stable I consider it as a positive return. We are comparing physical gold as an alternative to paper currency and digital currency (in the future). Inflation is a fall in the value of paper currency or digital currency. Paper currencies decline in value every year. The stable gold price has a higher purchasing power than paper currencies.
COMEX SILVER MARCH 2022 (current market price $2277.00)
- Weekly Support: $2070.20, $2128.20, $2163.80, $2206.40 and $2222.10
- Weekly Resistances: $2272.80, $2301.20, $2366.20, $2424.70, $2485 and $2602
- Bullish View: Silver has to trade over $2128.20 for the rest of February month to rise to $2485.00 and $2602.00.
- Weekly trend is neutral. But silver will crash to $2128.20 just in case it does not break $2301.20 by 10th February close (Thursday).
A bit on how to trade
An ex-client wants to restart trading in gold, silver and crude oil. They want to trade with limited capital and limited risk.
My answer is that the first four trades will be very difficult. The first four trades have to be profitable. Patience and calculated risk have to be taken to ensure that the first four trades are profitable. In case the first four trades are not profitable then do not trade. My intention has been to ensure capital protection at any cost. We always ask whether his intention to trade is for investment or for speculation and thereafter advise accordingly.
HAVE A GREAT WEEK!
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