There is no key US economic data release today. Next week (Monday to Wednesday), there are market moving US economic data releases. Each of the US economic data releases will be seen from the impact of current spread of covid in USA. Thanksgiving on Thursday and Friday will also impact gold and silver.
Use a buy on sharp dips strategy in gold and silver today and Monday to buy for first week of December. Copper and crude oil will be volatile. I expect crude oil to fall first and then rise. If people travel less in Thanksgiving due to covid fear, then demand will be less. Short term weak fundamentals should result in a correction in crude oil.
Gold price trend with Biden as president of USA (part 2 of part 2)
Yesterday we spoke of the world politics under Biden. Today let’s discuss finance under Biden. The biggest challenge for Federal Reserve and most central banks will be to decide when to start moving away from negative interest rates. Vaccine will not have an overnight impact on world economy and USA economy. Jobs in USA will not return to pre-pandemic levels once a vaccine starts reaching the masses. It will take time. I expect asset bubbles to be created and also get busted next year once the Federal Reserve gives the slightest indication of moving away from negative interest rates. Right now every investment is done for the short term and also done with the mirage of hope to make a quick buck. I never liked Yellens policies. There is speculation that Yellen will be made the treasury secretary. US dollar will bust if Yellen is made the indirect Federal Reserve chairman.
The real US dollar policy under Biden will also need a close watch. USA has to balance between a strong US dollar and a weak USA dollar in phases. Indirect US dollar depreciation can create a currency war among central banks. In my view chances is very real of a currency war among central bankers. Biden has to ensure that currency war does not stretch for a very long time. Gold price and bitcoin price will reach stratosphere if currency war is long.
Trump tried to revive the USA manufacturing sector by starting the trade war. Biden has to ensure the continuity of Trump trade war policies in way that USA does not befriend its NATO allies. Forex and precious metals will be impacted more by Biden’s stance on trade war. One needs a close watch on team Biden on their outlook on trade war.
To sum it up, it will be a big challenge for Biden (as the president of USA) to ensure that USA continues to be the world leader. There are two political alliances (i) Turkey-Russia-China-Iran alliance can become official anytime. (ii) RCEP will be a tiger at fag end of Biden presidential term. China is also doing everything to ensure that China Yuan gets accepted globally just as the US dollar. Chinese financial service sector will give a Americans tough time in the next four years. Team Biden's counter measures will also be closely scrutinized.
Irrespective of whatever Biden does or does not do, gold prices will rise see a significant rise from current of $1865 in four years time. The real purchasing power of US dollar will sink. This is the time to increase allocation to hard assets. What we have seen from May this year (hard asset price rise) is just tip of the iceberg.
COMEX SILVER DECEMBER 2020 – current price $2422.50
- Silver can rise to $2550 as long as it trades over $2350.
- There will be a free fall if silver trades below $2350 to $2260 and $2200.
- If US stock futures crash then silver price will also sell off.
COMEX COPPER DECEMBER 2020 – current price $322.00
- Copper faces big long term resistance between $331.50-$337.40-$344.70. Only a break of this zone will result in $400 and more.
- There will be a fall to $278.80 in case copper does not break $331.50-$337.40-$344.70 zone in the next three week/
- Right now copper trend is bullish as long as copper trades over $312-$315 zone.