As a trader, my view is that Friday’s fall was to scare people from investing in gold and silver and opt for stocks instead. Options markets will see an increase in call options sellers and put option buyers. Gold June future will expire in ten days’ time. Gold price has been manipulated to ensure losses for call options buyers and put options sellers alike. It is very easy to reverse the sentiment when fear and panic grip the retail traders and retail investors.
There are two kinds of sentiment for gold. (a) One which is short selling in every major rise for $1650 and $1500. (b) Another is buying on every major fall for $2500. But before you take either side, these are the traders who are willing to take a risk of more than $200 per trade. My view is that I am bullish on gold but only from the end of September. Even if the gold price crashes then it will be very difficult to fall below $1650. If the gold price falls ten percent from here (before the end of the third quarter), then global stock markets will plunge twenty percent.
Stagflation is happening really. I still believe that gold and silver are the best hedge against stagflation. For aggressive investment in bullion, one needs to wait.
Sentiment for base metals is very bullish on the expectation of huge demand from China. Key factory regions in China were closed in April and till last week. They have opened yesterday. China is expected to move to normalcy before the end of May. Copper, and all base metals may have formed a medium-term bottom last week. The only risk to my view is another sustained sell-off in stock markets for a week.
Gold prices in Asia will find it very difficult to fall more than seven percent from today’s price for the rest of the year. In India, it will be very difficult for the physical gold price to fall below Rs.46500-Rs.47000 per ten grams for the rest of the year. Local Asian currency has to gain against the US dollar for gold price to sell-off. Right now most Asian currencies have a weakening bias against the US Dollar.
Spot Gold: (current price $1822.30)
· 200 day moving average: $1837.90
· Gold has to trade over $1816 to rise to $1837.90 and $1852.60.
· There will be sellers only if gold trades below $1816 to $1805.30 and $1784.10.
NYMEX CRUDE OIL (July 2022) -- current price $111.30
· Key resistance is at $116.70
· Key support is at $107.70
· Crude oil will see a quick rise if it trades over $114.00 to $118.50 and $122.30.
· Crude oil will crash only if it trades below $107.70 to $104.30 and $102.40.