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Asian Metals Market Update: Price moves will be volatile

Do not think of what will happen in September. Just strategize for next week. Next week will be a big week for gold and silver. Medium term to long term Investment in gold and silver can be done at current price. Day traders, jobbers and very short term traders of gold and silver have to be careful. Each day is bringing its own challenges for day traders and jobbers. Investors of gold and silver should never be worried by day to day news and day to day price moves.

Gold and silver were very wild yesterday in USA session. Sell stops, buy stops where both triggered as soon as Federal Reserve chairman started delivery this speech. Price moves will be volatile but not scary. Copper and nickel are looking very bullish. Boom or bust time for the US dollar Index in the next two weeks.

FOMC

The Federal Open Market Committee announced that it has approved changes to its written policy strategy that are widely seen as leading to an easier monetary policy stance over time.

In a statement, the Fed said that it has adopted an “average inflation target” and recognizes the benefits for a strong labor market. The U.S. economy should continue to recover, in fits and starts, but many unemployed workers will have trouble finding work. 

Our View on FOMC

View change indicates that interest rates in USA will remain soft for a very long period of time. Gold and silver will rise/remain firm a as result of Federal Reserve policy change. Federal Reserve has acknowledged that slower growth in USA is here to stay. It has shifted focus on US jobs. Various US jobs numbers (NFP, ADP, etc) will have a bigger impact on bonds, precious metals and the US dollar Index than CPI, PPI and other US economic data releases. Right now, next week’s various US jobs numbers will be the key. Hurricane impact will not be there on the US jobs report next week.

COMEX GOLD DECEMBER 2020 – current price $1945.80

  • Gold needs to trade over $1900.60 till next to rise to $2006.30 and $2076.10.
  • Corrections upto $1900.60 are a part and parcel of the short term bullish trend.
  • Do not mix day trading or short term trading with long term investing in gold.
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