Asian Metals Market Update: Traders Prefer to Go Long

Sharp rise from the day’s low yesterday suggest that traders will prefer to go long in gold and silver and short the US dollar index before key US economic data releases and key central bank meetings over the next three weeks.

Indians, Asians in general and even Eurozone are seeing a big increase in gold investment. I have not seen such a huge number of people wanting to invest in gold or are investing in gold. Recessions fears is also driving people into gold. There is a serious recession fear as of now. Factories are working on ultralow inventories. Only those factories with exposure to China are working with extra-large inventories of base metals.

Interest rate policy by the Federal Reserve and European central banks in the first week of May will decide the trend of gold, silver, and copper. A policy divergence between Federal Reserve, Bank of England, and the European central bank will be very bearish for the US dollar Index and bullish for gold, silver, Asian FX, and Asian stocks. We need to look convergence-divergence stuff among key central banks w.r.t interest rates.

From a trading perspective and short term investment perspective, key technical support need to be held. Spot gold needs to trade over fifty day moving average of $1927.00 to be in a medium term bullish zone. Spot silver has to trade over $24.00 to be in a short term bullish zone. Comex copper July has to trade over two hundred day moving average of $375.70 to be in a medium  term bullish zone.

A stronger NFP, ISM and higher CPI for April month will cause the Federal Reserve to be bold on interest rate hike. A very low NFP and very low ISM numbers will cause the Federal Reserve to be caught between growth versus inflation. Pause in interest rate hike will be there from June FOMC meeting onwards only if April and May month see a sharp decline and NFP and other job number hiring along with a crash in ISM manufacturing and ISM non-manufacturing. 28th April to 5th May will be the real test for continuity of bullish trend in gold, silver, copper and crude oil.

Chinese retail demand is going to be robust for the next four months. Property sector in China is going to be hotter with passing of each month. Thereafter export orders for Diwali, Thanksgiving, Christmas and New Year will decide Chinese industrial metals demand.

Day traders and jobbers have to remain on the sidelines in all metals and energies every day this week. I expect big gap open every day this week and next week. A bad trade left over the next trading day and there can be a capital erosion. Determine your risk appetite and make prudent decisions. Emotion, grapevine and fear trade all have to be removed from the mind or sent to the recycle bin if you are the make the most profitable next two weeks.

COMEX GOLD JUNE 2023

• Key price to watch: $2005.70
• Gold June has to trade over $2005.70 to zoom to $2030.50 and $2060.
• Anything can happen zone is between $1999.70-$2005.70.
• Mild sell off will be there only if gold June trades below $1999.70.
• Crash/Sell off will be there if comex gold June does not break $2014.20 by Friday close.

COMEX SILVER JULY 2023

• Key price to watch: $2499.00 and $2560.00
• Silver July has to trade over $2499.00 to rise to $2565.00 and $2631.
• Crash/Sell off will be there if silver trades below $2499.

NYMEX CRUDE OIL (June 2023) 

• Crude oil can rise to $82.20 as long as it trades over $76.00.
• In the month of May, near dated crude oil future has to trade over $76.00 to be in a short term bullish zone.

COMEX COPPER JULY 2023

• Copper has to trade over $392.80 to rise to $408.90 and $413.90.
• Crash or sell off will be there if copper trades below $392.80 till Friday.

Key US economic data releases till 28^th April 2023

• 25^th April: CB Consumer confidence (April)
• 26^th April: Durable Goods (March)
• 27^th April: Core PCE (Q1), GDP (Q1),
• 28^th April: Core PCE (March), Personal Income (March), Personal Spending (March)