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Asian Metals Market Update: July-30-2020

Gold is bullish. Silver will reach $50.00 much more quickly than most of us expect. This is the message given by FOMC meeting. The US dollar Index has a key long term support at $90.70. The only way gold and silver can correct or crash is (a) US July jobs numbers (ADP+NFP combined) beating street expectations (on the higher side) by a big margin. (b) There is very big seller taking some profit.

FOMC meeting

  1. The virus is moving so fast that policymakers are taking cues about the economy from real-time flows of data from firms that track people’s movements through cellphones, for example, or provide signals about hiring.
  2. The policy statement gave no hint of such a change in interest rate stance or other steps.
  3. The surge in U.S. coronavirus cases and the restrictions aimed at containing it have begun to weigh on the economic recovery.

Our View on FOMC: Everything is dependent on trend of Covid in USA. US dollar will gain and gold/silver prices will crash if covid infections and covid deaths show signs of a sustained decline. Covid cases in USA has to go the Europe and UK way for any meaningful gain in the US dollar. Decline or sharp corrections in gold and silver can be there. I do not expect a bearish trend. Traders and markets are always ahead of times. August daily Covid cases in USA needs to be tracked closely and observed closely.  The pace of rise of gold and silver should slowdown from the second week of August.

What next today

US second quarter GDP numbers and US weekly initial jobless claims is the key. (a) If gold and silver fall after these numbers, short sellers will come into picture, US dollar Index will gain. (b) If gold and silver rise after these numbers then chances of $2100 and $2800 will be very high. Intraday volatility should rise till next week.

COMEX SILVER SEPTEMBER 2020 – current price $2438.50

  • Silver needs to trade over $2395 today to rise to $2604.40 and $2805.
  • Sellers will be there only below $2412 and crash below $2385.
  • Key support till next week is at $2220.

MCX SILVER SEPTEMBER 2020 – current price Rs.65180

Support: 63749-64596

Resistance: 66959

View: Silver can rise to 67494 as long as it trades over 64596. Silver will crash only if it trades below 64596.

Trading Strategy: Trend is bullish. Buy on any 1250-1500 dip (if any with a stop loss below 63250 for tomorrow and a price target of 67494.

(prices in Indian rupees above)

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