Gold and silver can rise on short covering before the release of US August non-farm payrolls. It may not be a bullish trend, but a bear market rally. Headline August NFP has to come in below 125,000 for a relief rally in gold and silver.
Trade for intraday till 13th September. If gold and silver continue to fall till 13th September (US August CPI numbers) then invest for the short term with higher trailing stop loss. Federal Reserve will raise interest rates by 75bps. This is fully discounted in by the markets. The surprise will be only if there is a 100 bps or one percent interest rate hike.
The current state of panic among traders and investors indicates that traders are betting on 75bps interest rate hike in November, December, and January meetings. I do not think so. I expect a 25 bps in November and December. Demand side inflation will sink from October and indicate a recession. Supply side inflation is in the control of American president and global political heads.
A bit on European electricity prices
Electricity is not produced more expensively than in 2020. The difference between the then and the current price goes purely into the profits of energy companies — not only manufacturers but also all kinds of traders. They turned the energy shortage, artificially induced by the European Green Deal and fueled by Putin’s games with gas, into a playground where they tested how far they could raise the price.
That massive increase in prices resulted from the European pricing system, which is determined by the most expensive source. According to its price, all other suppliers cash out. For a long time, the most expensive resource has been gas, which has been driving up all other prices.
Our View on the above: The historical rise in electricity prices in Europe and UK is purely a speculative play. Fundamentals are not involved. Under the garb of warmer weather, speculators with the connivance of electricity companies are looting the European masses and hostage taking of the global economy. On a personal level, I do expect people of India to suffer the fate Europeans once India adopts prepaid electricity meters.
- Key intraday support: $1674.80
- Key intraday resistance: $1708.30
- Spot gold will crash if it trades below $1690.10 to $1674, $1659 and $1641.
- Spot gold needs to trade over $1708.30 to be in an intraday bullish zone.
COMEX COPPER DECEMBER 2022
- Copper has a big support between $334-$337 zone.
- Copper needs to trade over $334-$337 zone to rise to $354.90.
- Copper will near $298.50 if it trades below $334 today (in USA session), Monday and Tuesday.
MCX GOLD OCTOBER 2022 (current market price Rs.50085.00)
- 200 day SMA: Rs.50295.00
- 100 day SMA: Rs.51117.00
- 300 day SMA: Rs.49336.0
- MCX Gold October needs to trade over 200 day simple moving average of Rs.50295.00 till next week to be in a short term bullish zone.
- MCX Gold October can fall to Rs.49336.00 and Rs.48714 (four hundred day moving average) if it trades below Rs.50295 today after the release of US August nonfarm payrolls and till next week.
- A daily close below Rs.50295.00 today and open below Rs.50295 on Monday will be very bearish for MCX Gold October.
(prices in Indian Rupees/usdinr above)