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Asian Metals Market Update: Traders be cautious

  • Gold and silver are trading over key short term technical support. But they yet to break medium term resistances.
  • US dollar Index is trading below key short term support. There will be a technical breakdown in the US dollar index falls this week.
  • Asian currencies such usd/inr. Usd/idr etc have a big week. If they fall today, then a big short term sell off will be there.
  • US treasury secretary Janet Yellen’s Asia tour and its long term impact on Asian forex markets and Asian bond markets will need a close watch. USA is trying to be extra friendly with nations close to Russia like India among others. USA is not taking up previously sore points with Asian nations in a push to alienate Russia. Bond market inflows in Asia will rise sharply for the rest of the year.
  • China and the new developments like relaxed covid policy and new regulation asking financial institutions to extend support to property developers will need a close scrutiny. At the end of the day, all the new reforms and new measures in China are direct and indirect stimulus measures. Chinese demand and Chinese growth will only rise for the rest of the year and in 2023. The world will keep a close watch on China. (A notice to the institutions from the People's Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) outlined 16 steps to support the industry, including loan repayment extensions.)
  • Geographical diversification has started among large American corporates and European corporates. They are opening new factories or new production facilities in Asian nations so to reduce reliance on China and Russia. Asian currencies have either formed a multiyear top as on date or further weakness will be temporary. Asian (ex china) economic growth will see a slow and steady rise.

We need to keep on mind the above points while making short term investment in gold, silver, and base metals. I would like a slow and steady rise this week.

US tech companies are laying off in quite large numbers. US November Nonfarm payrolls will have the impact of tech sector layoffs. NFP on 2nd December should come in very low and/or even negative. A lower NFP is one the key factors dictating interest rate hike decisions by the Federal Reserve. Jobs reduction by US tech sector and other sector makes me believe that IF inflation falls, then there after December, Federal Reserve will not raise interest rates. BUT on the contrary, if hiring continues to rise in November to January months, that too despite huge lay off, then it will imply that US corporates are strong and decade high interest rates are not a deterrent to higher economic growth. December NFP will have a one time of mass cyclical layoffs. It will not tell us the real picture of US jobs sector. Traders who are investing for the short term on NFP have to be cautious.

Weekly traders have to remain on the side-lines. Anything can happen. 

Spot Gold:

  • Daily support: $1745.90
  • Daily resistance: $1778.00
  • Spot gold has to trade over $1745.90 to rise to $1796.90
  • Sell off only below $1745.90.

Spot Silver      :

  • Daily Support: $20.87 and $21.32
  • Daily Resistance: $22.11
  • Spot silver has to trade over $21.70 to rise to $22.11 and $22.70.
  • Watch $21.70. Silver can move $1.25 either side from $21.70.

NYMEX CRUDE OIL (December 2022) – Current market price $89.17

  • Crude oil has to trade over $86.80 to rise to $94.40.
  • Crude oil will break free from the $80-$100 range and form a new range. Do not trade without trailing stop loss.
  • I am bullish in crude oil for the December and January. Only a warm winter in Europe and USA will cause a plunge in price.

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