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Asian Metals Market Update: Inflation and interest rate hikes are global hot topics

Gold and silver and all industrial metals have to trade over Friday’s closing this week to be in a weekly bullish zone. Daily closing prices of Thursday and Friday are the key from a technical perspective. Bank of Japan has warned of big currency intervention to stem the slide of the yen versus the US dollar. It remains to be seen if BOJ will be successful or not.

Inflation and interest rate hikes are a hot topic everywhere. There will be position squaring and rebuilding for next quarter. July to mid-September is a big summer travel season and summer expenditure in Europe and USA. Thailand, South Korea, and other nations have opened to tourists without any covid related restrictions. There will be economic damage if inflation dents summer travel and summer expenditure in northern hemisphere.

The net disposable income is on the decline for the common man. His so-called long-term investments are giving a negative return. The cost of food, local travel, communication expenses and electricity bills, and other survival expenses is rising every week. Sooner than later, the reduced net disposable income will cause a big reduction in expenses and savings as well. The severe slowdown is here. I am not sure of a sustained recession.  

Fundamentally crude oil should fall. India’s school summer vacation will be over by the first week of July. Indian demand for petrol and diesel will form a yearly top by the first week of July. Monsoon arrival in most parts of India by the first week of July will also reduce diesel demand from industries. China is already seeing lockdown once again in parts of Beijing and Shanghai area. Chinese demand for crude oil will be less. Incremental demand of crude oil from India will be less from the second week of July. Manmade induced shortage of diesel in USA and Europe makes me believe crude oil trading should be for intraday or weekly and nothing more. Libyan supplies will fall even further. USA and Biden has created a deliberate shortage for crude oil just to jerk up prices. Iran, Venezuela, Russia, and now Libya all the supplies from major producers are not there. Something big is cooking behind the curtains which we do not know. Conspiracy theory makes me believe that masses are being forced to shift to electric vehicle and the not so green vehicles by jerking up crude oil prices.

COMEX SILVER JULY 2022 (current market price $2165.00)

  • 100 day MA: $2305.70
  • Silver has to trade over $2259.60 this week to rise to $2366.10 and $2485.60.
  • Silver will crash if it does not break $2259.60 by Thursday/16th June close to $2060.10 and $1978.60.
  • Overall there will be rallies in silver as long as it trades over $2060 on daily closing basis for the rest of June.

COMEX COPPER JULY 2022 (current market price $424.05)

  • Copper has to trade over $419-$424 zone to rise to $445.30 and $461.30.
  • Copper will crash only if it trades below $424.
  • A daily close below $424.00 for four consecutive days will result in a fall to $409.70 and $397.60.
  • This week is a make week or break week for copper and all industrial metals.

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