Asian Metals Market Update: Inflation will not vanish

• Spot gold needs to trade over $1995.00-$2005.30 zone for the rest of April to be in a bullish zone.
• A daily close over $25.50 in spot silver, today, tomorrow and Monday will pave the way for $29-$30 zone by end April.
• Nymex/WTI crude will see a technical breakout on a break of two hundred day moving average of $83.72.

CPI fell in March but core CPI is firm. Inflation will not vanish overnight. I expect a fall in core CPI inflation over the coming months. Interest rate hike of 0.25% will be there in May meeting of the Federal Reserve.

Trend is bullish for gold and silver and copper. Recession worries are flooded all over the newswires and social media. Base metals, crude oil and stocks should be plunge and moved into a long term bearish zone if real recession was there. There is a slowdown and not a recession. Base metals and energies are firm on hopes that central banks money printing machine will avert a recession.

Masses from every nation are increasing their long term investment in gold. Indians and Asians have already started increasing their long term physical gold investment. They are least bothered by historical high price in gold and silver. They are just buying. Next week is “Akshay Tritiya” in India. I expect another record high gold sales. Indians will continue buy gold even with price over 60k.

FOMC minutes

• The staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.
• Fed officials expect gross domestic product growth of just 0.4% for all of 2023.
• Reflecting the effects of less projected tightness in product and labor markets, core inflation was forecast to slow sharply next year.
• Concern over broader economic conditions remained high, particularly in light of the banking problems. 
• Several participants emphasized the need to retain flexibility and optionality in determining the appropriate stance of monetary policy given the highly uncertain economic outlook,
• Inflation data has been generally cooperative with the Fed’s aims.

Our View after CPI and FOMC Minutes

1. Gold and silver will continue to rise after the tame CPI numbers and uncertain global economic outlook for this quarter. It will very difficult to forecast the economic trend for the third quarter.
2. Copper, base metals and all industrial metals are an invest on crash strategy for end of 2024. Short term sharp sell off will be there in base metals (off and on) till the end of third quarter.
3. Federal Reserve officials are expecting a relatively high growth from next year. This implies bond yield will sink and global stock markets will see another historical bull run from next year.
4. Interest rate can be cut (even without a Federal Reserve meeting) anytime if economic conditions suggest. “Inverted V shaped” graph will be there for the US dollar Index.
5. In short all asset classes will be highly volatile for the rest of the year. Federal Reserve officials and every central bank head will take monetary decisions based on short term economic outlook. Get ready for more asset bubbles in 2025.

G7 to discuss digital currency standards, crypto regulation

• Group of Seven (G7) advanced economies will consider how best to help developing countries introduce central bank digital currencies (CBDC) consistent with appropriate international standards.
• As a priority of this year, the G7 will consider how best to help developing countries introduce CBDC consistent with appropriate standards, including the G7 public policy principle for retail CBDC.
• Outside the G7, China has been leading the pack on issuing a digital currency.
• G7 central banks have set common standards toward issuing CBDCs as some proceed with experiments.

Our View on digital currencies: All of us will be at the mercy of central bankers and elected leaders for our needs. Central banks and their related agencies will have real time information of our sources of income, our lifestyle, and our expenses and investment. Our lives will be manipulated by so called “too big too fail” corporations including pharma companies. Physical gold and physical silver are the only investment which we can hide from the state and manipulators once digital currencies takes over paper currencies.

IMF WORLD ECONOMIC OUTLOOK FOR 2023

• IMF World Economic Outlook forecast real GDP growth of 2.8% in 2023 and 3.0% in 2024 - one-tenth of a percentage point lower than what it predicted in January for each year. The global economy grew 3.4% in 2022.
• The downgrades reflected weaker performances in some larger economies, such as Japan, Germany, India and Brazil, offsetting a stronger performance in the United States and a shallower contraction in Britain.
• The IMF also cited expectations of tighter financial conditions this year.
• the IMF's chief economist, Pierre-Olivier Gourinchas, said inflation is still the bigger problem and that price stability should take precedence over financial stability risks for central banks' monetary policy.
• Severe adverse scenario of a new financial crisis could prompt sharp pull-backs in lending and household spending and a rush into safe-haven assets. 

Our View on IMF: Nations with large forex reserves will be the safest to invest. Rise in bilateral trade away from the US dollar will reduce some of the risk citied by IMF. Inflationary pressures are there and will be there. Central bankers and financial policy makers have to increase the acceptable level of inflation. Overall inflation will remain above the current acceptable threshold of every nation. Gold is seeing a big increase in one investment and this trend is here to stay. I also believe that the worst is over bitcoins and crypto currencies. Crypto currencies will see a slow and steady rise for the rest of the year. BTC value is not zero. BTC value will not be zero thanks to the banking crisis.

Elections are not there in any major country this year. India, Indonesia, South Korea, Russia, Spain, UK and USA are all going to elections in 2024. Politicians and central bankers will do everything to ensure that inflation and job creation does not cause a regime change. Major crisis (if any) will be doused or covered up in the next twelve months. The worst should be over for global economy in the next one year. Short term uncertainties and fear can continue for a longer period than most of us expect. Gold is the best hedge.

I once again repeat, day traders, weekly investors and fortnightly investors should be caused. “W” shaped price moves will be there without any prior intimation for the rest of the year. “W” shaped price moves will be there in all asset classes and not just limited to bullion, base metals or forex.

Spot Gold

• Daily support is between $1994.60 and $2007.20
• Daily resistance: $2027.40 and $2029.10, $2036.00 and $2064.80
• Spot Gold has to trade over $2007.00 to rise to $2041.60 and $2064.00.
• Mild sell off will be there is spot gold trades below $2007.00

Spot Silver:

• Daily Support: $25.00
• Daily Resistance: $25.94 and $26.50
• Spot silver can rise to $26.57 as long as it trades over $25.00.
• Spot silver will rise very quickly if it trades over $25.60.

NYMEX CRUDE OIL (May 2023) 

• Crude oil has to trade over $83.70 to rise to $90.10.
• Watch $83.70. Crude oil can move $6 either side from $83.70.

COMEX COPPER MAY 2023

• Copper has to trade over $401.00 to rise to $417.00.
• Copper will rise very quickly if it trades over $409.00 today.
• Crash or sell off will be there if copper trades below $401.00.

LME COPPER SPOT (Current Market Price: $8922.00)

• Key support: $8748.00 and $8861
• Key resistance: $9062.00
• Copper needs to break and trade over $9000 till the first week of May to start another wave of rise.
• Psychological level is $9000.
• Crash or sell off will be there in copper only if it trades below $8861 today.