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Asian Metals Market Update: January 7, 2021

Comex Gold price has risen two hundred dollars from November lows of $1762.30 yesterday. Comex Silver price has risen over $6.00 from the November lows of $22.00 to $2810.50 yesterday. They have subsequently corrected. Gold and silver price rose in December due to scare of new strain of coronavirus and rapid spread of coronavirus in UK, USA and Europe. A weaker US dollar and low global bond yields also added to rise in price.

Right now gold price is getting support from lack of smooth transition of presidents in USA. Going ahead December Nonfarm payrolls on Friday, FOMC meet on 26th-27th January, US dollar weakness, Bond yields are among others factors to watch.

COMEX GOLD FEBRUARY 2021 – current price $1918.70

Support: $1708.60, $1755.80, $1808.60 and $1861.40

Resistance: $1955.80, $1985.00 and $2008.60

View:  Gold has to trade over $1885.60-$1897.60 zone in the short term to rise to $2008.60 and $2061.40. Gold will crash to $1808.60 and $1708.60 if it does not break $2008.60 in the next six weeks.

COMEX SILVER MARCH 2021 – current price $2718.80

Support: $2093.70, $2237.70, $2398.90 and $2560.10

Resistance: $2848.20, $2937.00, $3009.40 and $3314.00

View:  Silvers rise till future close on 26th February is dependent on the ability/inability to break past $3009.40. (a) Silver will fall to $2398 and $2093 first in case $3009.00 is not broken. (b) Overall trend is bullish as long as silver trades over $2398. Sharp corrections upto $2398 will be a part of the bullish trend.

MCX Gold February 2021:  (Current price Rs.50800.00)

Support: Rs.46184, Rs.47320, Rs.48346 and Rs.49488

Resistance: Rs.51529, Rs.52161, Rs.52671 and Rs.54834

View:  Gold needs to trade over Rs.49488 to be in short term bullish zone and rise to Rs.52671 and Rs.54834 and Rs.57506. Gold will fall to Rs.48346 and Rs.47320 if near term future does not break and trade over Rs.52671 in the next five weeks.

MCX Silver March 2021:  (Current price Rs.69716.00)

Support: Rs.55667, Rs.62542, Rs.66172 and Rs.67600

Resistance: Rs.72662, Rs.76292, Rs.77914 and Rs.83167

View:  Silver is bullish. But next wave of big rise to Rs.83167 and more will be there only if silver breaks and trades over Rs.72662. Silver will crash if it does not break Rs.72662 in the next three weeks to Rs.62542 and Rs.58912.

It will not be a one way price move in gold and silver this year. Volatility will skyrocket. Bond yields trend will have a big role in determining short term trend of gold and silver. Silver price is more dependent on trend of industrial metals more than precious metals. Long term gold and silver are a buy on dips strategy. Cautious optimism for the short term till FOMC meet on 26/27 January.

Traders and investors generally look for exit opportunity if gold and silver prices fall five percent or more. Do not invest in gold and silver if you cannot see a fifteen percent downside for the long term and five percent downside for the short term.

Boom-Bust-Boom-Bust type price moves will be there in gold and silver all through this year. Overall trend will be there. There can be weeks when gold and silver range trade.

Global vaccination drive can bring a short term correction in gold and silver price. But rapid acceleration in decline of purchasing power of US dollar and local currencies will ensure that gold and silver continue to rise for the next few years. Industrial applications demand of gold and silver is also rising with passing of each day. Demand side fundamentals of gold and silver are bullish for the long term.

I also see a realignment in NATO with India as a member and a big global political front. Turkey, Iran, Russia and China can form a new trade alliance anytime. Decline of the greenback will be very swift under Biden. Trump’s trade war policy with China and other nations is here to stay.

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