Key factors which are making headlines in global financial markets
- Interest rate hikes by central banks.
- US dollar Index above 100.
- Bond Yield rise.
- Central banks increasing gold purchases aggressively.
- Supply shortage or fear of supply shortage in soft commodities, industrial metals, and energies.
We have discussed the above quite frequently in our daily reports and weekly reports and monthly reports. If crude oil prices continue to rise till early June then I expect a 0.50% interest rate hike by the Federal Reserve in the May meeting and June followed by a pause for the rest of the year.
Aggressive interest rate hikes by Federal Reserve is needed to bring down commodity price inflation. There will be a global slowdown at the most two consecutive quarters followed by hyper-growth next year. (if Federal Reserve raises interest rates by half percent in May and June meetings consecutively.)
I believe that gold prices will rise even if central banks raise interest rates aggressively. The long-term fallout of the Ukraine war makes me believe that physical gold is an invest for the long term. US dollar will not die. Fear of Russian-style alienation by the USA and its NATO allies will ensure central banks take long-term steps to reduce US dollar trades and US dollar holdings. Gold is the only solution to prevent a Russian-style alienation.
US ECONOMIC DATA RELEASES THIS WEEK – There are no major market-moving US economic data releases this week except Federal Reserve Beige Book on 20th April. It is better if we trade in the technical this week.
COMEX SILVER MAY 2022 (Current Market Price $2595.30)
- Weekly Breakout price: $2702.50
- Weekly Breakdown price: $2457.50
- Bullish View: Silver can rise to $2915.50 this week as long as it trades over $2457.50.
- All price fall up to $2438.00 will be a part of the bullish trend.
MCX Crude Oil May 2022: (Current Market Price Rs.8170.00)
- Weekly Breakdown Price: Rs.7879.00
- Weekly Breakout Price: Rs.8334.00
- Crude oil has to trade over 7823.00 on a daily closing basis to rise to Rs.8589.00 and Rs.8916.00.
- Crash or bearish trend will be there if crude oil has a daily close below Rs.7823 for five consecutive trading sessions to Rs.7567.00 and Rs.7033.00.
- Crude oil will also crash if it does not break Rs.8589 by the end April to Rs.7033 and Rs.6666.00.
Look for news that can change the trend of all metals and energies. This can be a big week for base metals. Natural Gas is the dark horse. From a long term perspective, post Ukraine price trend is the key. Buying some far dated (January 2023) put options may be a bad investment strategy.