Asian Metals Market Update: Inflation numbers focus

Bullish factors for gold this week

1. Inflation numbers in USA has risen sharply. Producer price index in March rose sharply. If Consumer price index rises on Tuesday, then gold will easily break past $1760 resistance.
2. Sharp rise in coronavirus cases worldwide should result in higher investment demand for gold.
3. Technical breakout will be there only if gold gets a daily close over $1760 for three consecutive days to $1826.90.

Bearish factors for gold

1. Bitcoin is replacing gold as an inflation hedge. (at least temporarily).
2. Investors are continuing to flee gold exchange traded funds. Gold ETF has seen net outflows in the last four months.
3. US dollar Index if it trade over 92.40 can cause a selloff in gold.

Bond yields can be a bearish as well as bullish for gold price.

Silver

Spot silver has a hundred day moving average at $25.69. Two hundred day moving average is at $25.11. Convergence of 100 day MA and 200 day MA can bring two big price move possibilities in silver. (a) A break of $25.69 will result in $27.48 and $29.50. (b) Failure to break and trade over $25.69 will result in $24.25 and $23.50 this week.

I will prefer to use sharp corrections upto $23.50 to invest for the short term and medium term in silver.

Copper

Chinese physical demand will be the key for copper. Copper is not attracting new short term investors. They are on the sidelines. Copper can sell off first and then rise if physical buyers do not come in. Comex copper May will move into a short term bearish phase if there is a daily close below $397.10 for three consecutive days.

Crude oil

Rise in global coronavirus cases should result in reduced demand for crude oil. Fundamentally crude oil should fall. However Opec is reducing crude oil supplies whenever price falls. Long term bullish price projection is also preventing prices from crashing.

NYMEX CRUDE OIL (May)  - current price $59.32

• Key support: $55.45, $57.30
• Key resistances: $60.40, $61.30, $64.80 and $67.70.
• Crude oil will break free from $57.00-$67.00 wider trading range and form a new range anytime in the next two weeks.
• Crashes or sharp corrections upto $53.83 will be a part of the short term bullish trend.
• There will be a free fall if crude oil trades below $53.83 anytime before future close.  

Investors are asking when interest rates will be raised. Rise in US PPI numbers may be temporary for central banks. Investors will continue to focus in inflation, bond yields and US dollar Index.