Asian Metals Market Update: Gold reacting to US economic data

Everyone is bullish in gold and silver for the long term. There is no doubt over it. Trading and short term profit is needed to generate income. Income is needed to meet our needs. I am restarting the daily series which will now focus on short term trading strategies in metals, energies. I will be adding crypto currencies as well.

Gold and silver rose after the Federal Reserve meeting last week did not alter its outlook in economy, inflation and interest rate. A lower than expected GDP number was matched by an equally sharp rise in June personal income and personal consumption. Gold pared some of the week’s gains. This implies that bullion price is dependent on US economic data releases and fundamentals of US economy. Inflation for the time being is being ignored by central bankers. In August, economic data releases of July month will be the key.  

Averaging close price of this year and average closing price of July is the nearly the same for comex gold future. This implies that there will be very big $150 and more one way price move in gold anytime. To continue its bullish trend (in August) comex gold December has to trade over $1804.50-$1806.20 zone.

Comex Silver September (intraday view) Current Price $2554.50

1. Support: $2526.20
2. Resistance: 2574.90 and $2637.50 (one hundred day moving average)
3. View: Silver needs a daily close over $2574.90 today and tomorrow to rise quickly to $2673.90.
4. Today silver needs to trade over $2525.90 to rise to $2574.90 and $2637.50. Silver will crash only if it trades below $2525.90 to $2493.70 and $2461.40

Gold will fail to attract short term hot money in August if it trades below $1700-$1900 range. A $200 trading range will not attract punters and reditt traders. Crypto currencies and stocks will offer much more return than gold. To attract short term hot money there has to be indications that gold price will break past $2000. In 2020 in MCX gold futures the masses was not investing in gold Rs.50,000 per ten grams but the same masses or herd as I call them were very happy investing in MCX gold futures at Rs.52,000 and more on expectation of Rs.70,000 and more in a few months. So unless there is media hype that gold price will break past $2000 for more, herd or masses or retail investors will not invest aggressively in gold. I still believe that silver is undervalued and is invest on dips. But cautious optimism as silver has crashed whenever I have been most optimistic on price.