In my view gold, silver, copper, and all industrial metals have formed a multi-year bottom in the month of July. The only risk to my view is a 0.75% interest rate hike in the September meeting followed by small interest rate hikes in November and December.
I am not sure how the markets will react to the US July non-farm payrolls on Friday (5th August). If gold and silver correct sharply before the release of NFP, then it is a buy for me with higher trailing stop loss.
US July consumer price index on 10th August and US July producer price index on 11th August, if they come in extremely high, can cause a temporary sell-off in gold and silver, a sell-off in stocks as well. One needs to trade very carefully in gold and silver between 5th August (Friday) and 11th August (Thursday). If spot gold trades over $1770 between 5th August and 11th August close, I am very confident that it will break past $1900 and near $2000 before the first week of September.
A high July nonfarm payrolls of over 400,000 accompanied by very high US July inflation numbers will cause a sharp sell-off in the bullion price. Both the parameters have to be met. If both are not met, then for me then it is invest on crashes for the September FOMC meeting.
Gold will attract new investors or there will be a big increase in long positions in comex futures and other gold exchanges if the price rises on or after 11th August. It will be very quick rise. Big rise in physical demand in Asia plus short- term hot money equals price nearing $2000. But a rise in gold price will be accompanied by gains for Asian currencies versus the US dollar.
A sustained bearish trend in gold, silver, and base metals will be there only if prices continue to fall after the July inflation numbers next week.
COMEX SILVER SEPTEMBER 2022 (Current market price $2020.70)
- Silver has to trade over $1968.80 to rise to $2127 and $2235.
- Silver will also crash if it trades below $1968.80.
- Silver will rise very quickly if it trades over $2070 this week.
- Trend is bullish.