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Asian Metals Market Update: Indians brought unthinkable quantities of Silver..

The world is rejoicing a major Russian setback in the Ukraine war. Stocks rose, US dollar fell and bond yields also fell on Russian setback. Gold and silver rose on the back of a technical breakout and massive short covering. There will be some serious trading and investment with high volumes in all asset classes till March of next year.

After the US August consumer price index numbers today

  • Spot gold needs to trade over $1730 to be in a bullish zone and target $1772 and $1800+.
  • Spot silver has to trade over $18.80-19.00 for the rest of September to target $22.50 and more.
  • Spot silver will zoom to $21.00 today if it trades over $19.70 after the CPI numbers and days close.
  • Comex copper December will near $400.00 if it trades over $366 after CPI and till 22nd September.
  • Crude oil and natural gas will be a punters zone once again.

Global stock markets and Asian stocks markets will rise with fury if the Federal Reserve raises interest rates by 75 bps next week. US dollar should see a slow and steady decline after the FOMC meeting next week.

The pace of interest rate hikes will slowdown globally after next week’s FOMC meet. US dollar’s will loose its interest rate advantage. US dollar Index will see a correction, even a short term bearish trend. US economy will continue to outshine Eurozone, UK, and Japan. US dollar will not be routed in fourth quarter. There will be an orderly decline. I am bullish on gold and silver in the next four months and will prefer to use a buy on crash strategy.

Indians brought unthinkable quantities of silver when price crashes in the last week of August. Jewelers in India hedged in local MCX silver futures as premiums were very high. They will buy physical once silver premiums reduce. Retail investors grabbed silver in whichever way they could (futures, options, and physical.). In my view Indian’s grabbed silver (in the last week of august) as if it was available for free. As per my estimate silverware as a gift could be a historical high in India in the upcoming month-long festive season.

Spot Silver      :  (current market price $19.66)

  • Key intraday supports: $19.09 and $19.48
  • Key intraday resistances: $20.20
  • Spot silver has to trade over $19.71 till tomorrow to rise to $20.65 and $21.49.
  • There will be sellers only if silver trades below $19.48.

MCX CRUDE OIL 19th OCTOBER expiry (current market price Rs.6944.00)

  • Key intraday support: Rs.6866
  • Key intraday resistance: Rs.7070 and Rs.7224
  • MCX crude oil October has to trade over Rs.6866-Rs.6900 wider range to rise to Rs.7177 and Rs.7379.
  • There will be a sell off only if MCX crude oil October does not break Rs.7177 by tomorrow close.
  • Intraday trend is neutral.

(prices in Indian Rupees above)

US DOLLAR-INDIAN RUPEE (USD/INR) (current market price Rs.79.2175)

  • 50 day simple moving average: Rs.79.5900.
  • Key daily support: Rs.79.0075 and Rs.79.1525
  • Key short-term resistance: Rs.79.5900
  • Usd/inr can fall to Rs.78.9550 and Rs.78.6650 in case it does not break Rs.79.5900 by Friday.
  • There can be a big gap open tomorrow depending on the traders reaction of US August consumer price inflation numbers at 6:00 pm Indian Time today.
  • Initial support is at Rs.79.1525. There can be rallies to Rs.79.7475 and Rs.80.0375 just in case usd/inr does not fall below Rs.79.1525 by tomorrow.
  • Technical indicators are indicative of the use of a sell on rise strategy. But the US CPI and PPI risk makes be cautious.
  • Initial public offering (IPO) has restarted in India. The fourth quarter should see continued IPO’s in India. Foreign inflows come along with IPO.
  • Usd/inr may have formed a short term top in August if energy price does not zoom before the US senate elections on 8th November.
  • Some big-ticket demand due to September half yearly financial year close can also cause a temporary spike in usd/inr.
  • Usd/inr price reflects a 75 bps interest rate hike by the Federal Reserve.

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