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Asian Metals Market Update: Gold's rise depends on technical breakout & US Dollar

The rise of gold and silver till Wednesday is dependent on two key factors (a) Technical breakout (b) US dollar Index direction. If gold and silver rise till Wednesday then it will attract more and more short term traders or casino traders as I call them. Gold and silver price rise will be like a Ferrari car if they are able to attract casino traders.

Major US economic data release is only from Thursday. Traders focus will be on the US president elect Biden and his policies.

Politics and Biden

Federal Reserve will do its job irrespective of who is in power. Trade war with China and rest of the world will continue under Biden. USA rules the world because of policy continuity irrespective of who becomes the president. USA relations with Iran and Turkey will be closely watched. American relations with Turkey and Iran sunk under Trump. Turkey is the gateway to Europe. Turkey and Iran are powerful Islamic nations with powerful armed forces.

Trade war with China is to prevent China from getting a technological edge over USA. Huawei 5G and other Chinese technologies are far superior and far cheaper than American 5G and other American technology. Try using any latest Huawei latest and top end mobile phone and I am sure you will ditch your Iphone12. Trade war with China on some pretext or the other will continue.  China will continue ditching investment in American treasuries. China is opening its financial markets to the world (in a big way). China will give competition to USA, India and other nations over the coming years. In short US dollar’s purchasing power will continue to decline. Gold, bitcoin and cryto currencies will be the alternative investment. In fact bitcoin and selected crypto currencies have to be a part of investment portfolio.

Financial markets are more than happy with a Biden win as Trump and his market shaking tweets will soon be history. There will be some policy consistency and less surprises from next year.

Asian currencies and gold

Indonesian Rupiah, Indian rupee and Pakistani Rupee are the few Asian currencies which gained against the US dollar. Local prices of gold and silver will be affected by the trend of your national currencies. Gold and silver dealers need to look at trend of local currency and then decide the hedging strategy.

COMEX GOLD DECEMBER 2020 – current price $1961.40

  • Gold can rise to $1995.90 and $2040.40 this week as long as it trades over $1939.60.
  • Sellers will be there if gold trades below $1939.60.
  • Gold will rise quickly and move for a new all time high if there is a daily close over $1974.90 for three consecutive days.

COMEX COPPER DECEMBER 2020 – current price $317.80

  • Copper has to trade over $319.90 today to be in intraday bullish zone and rise to $323.30 and $330.90.
  • Watch $319.90. Copper can move $17 either side from $319.90 anytime this week.

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