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Asian Metals Market Update: Rising Bearish Bets on USDX

Bearish bets on the US dollar index continues to rise with passing of each day. This is one the reason why gold and silver recouped yesterday’s losses as if there was never a fall. Even I expect usd/jpy to fall below 125.00 in the short term and below 100 in early 2024. I am bearish on the greenback.

Growth differential will narrow sharply between USA and Eurozone, USA and Japan, USA and China. Interest rate gap and bond yield gap has topped out between USA and rest of the world or is expected to narrow sharply this year. This is the expectation. Eurozone is highly dependent on China for growth is the message. Europe’s growth concerns, recessions concerns vanished like a spirit once China rolled back its zero covid policy. Most of traders and analysts believe that euro and cable have formed a multiyear low last year versus the US dollar.

China and Chinese growth will set the trend for the US dollar Index. Any sharp fall in Chinese growth or a renewed covid restrictions in China will cause a sell off in euro, cable and yen. US dollar Index and US bond yields will rise sharply and move into a bullish zone once again if and only if Chinese growth lags expectation. We need to keep a close watch on China and all kinds of developments with China. Flexible plans will be needed in case China causes major disruption in global financial markets.

The “X factor” in 2023 will be the stopping of Ukraine War. No one really knows the changed political equation in Eastern Europe and Asia once the war comes to an end. Ukraine war will come to an end if not this year then next year. Food grain, fertilizer and Russian produced industrial metals and their medium term price trend will impact all asset classes. There is severe shortage of fertilizer due to the Ukraine war. Wheat prices are rising in such a way as if wheat production is zero. Gold will continue to rise unless the stopping of Ukraine war brings an end to rising food price. (Even the Modiji government in India has kept a deaf ear to rising Wheat Flour Price in India.)

Spot Gold: (current market price $1934.80)

  • Daily support: $1908.30 and $1920.50
  • Daily resistance: $1942.00 and $1954.00
  • Gold has to trade over $1920.50 to rise to $1954.00 and $1977.10
  • Spot gold will crash only if it trades below $1920.50 till tomorrow.

COMEX SILVER MARCH 2023 (current market price $2365.50)

  • 50 day MA: $2296. This is the key short term support.
  • 400 day MA: $2258. This is the key long term support.
  • Key price to watch $2282.00 and $2321.00
  • Silver has to trade over $2282.00 to rise to $2427 and $2500.
  • Silver will crash/sink if it trades below $2282 till Friday.

NYMEX CRUDE OIL (March 2023) (current market price $81.80)

  • 100 day MA: $82.20
  • 50 day MA: $78.30
  • Crude oil can rise to $83.64 and $85.80 as long as it trades over $78.00.
  • Crash or sell off will be there only if crude oil trades below $78.00.

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