The focus will be on US economic data releases today and till Friday. There are no significant developments in Ukraine. Only significant developments and extreme developments in Ukraine will impact precious metal prices. It will be a technical trade till then.
US president Joe Biden wants to kill Russian President Putin. Such statements will only increase the chances of a sustained war in Ukraine. Gold will not move into a bearish trend in the short term as long as such words are uttered by US president.
Factors which affected gold and silver in the first quarter
- Interest rate hike by the Federal Reserve.
- The pace of interest rate hikes by all central banks.
- Inflation, hyperinflation, and stagflation.
- Ukraine war.
- Gold and silver rising despite sharp gains in the US dollar and rising bond yields.
- LME Nickel crisis.
- ETF demand in Europe and USA rose sharply in Q1.
- Central banks continued to increase their gold reserves.
- Sharp rise in energy price also supported gold and silver.
I am not elaborating on each and every point above. I have discussed them quite often in the past daily report and weekly reports. Economics took the backseat this quarter.
The global sentiment is in general bullish for the second quarter and a sell-off in the following quarters. I am bullish in gold and silver for the rest of the year. There will be corrections up to $200-$250 from the high’s. These will be a part and parcel of the long-term bullish trend.
Second-quarter (April to June) factors that will affect gold and silver price
- End of Ukraine war. Impact on supplies of critical raw material, base metals, and energies once the Ukraine war ends.
- Demand destruction (if any) of crude oil.
- What next after interest rate hikes in May and June by the Federal Reserve.
- Inflation trend and inflation expectation for the rest of the year.
- Crude oil and the natural price trend in the second quarter.
- As far as economics is concerned gold will crash if incoming data releases indicate chances of recession and stagflation.
- All economic data releases in the second quarter haven will be closely scrutinized for inflation and growth.
- Geopolitical changes after the end of Ukraine war.
I do not expect Russia to use nuclear, biological, and chemical (NBC) warfare. At the end of the year, Russia will be all about whether Putin rules or there is a regime change. NATO will disintegrate Russia into a number of small nations if and when Putin goes.
Gold and silver have a Ukraine war risk premium. There can be a very sharp correction if and when the Ukrainian war risk premium reduces. While a nuclear war risk will shoot up gold price by fifteen percent.
US ECONOMIC DATA RELEASES THIS WEEK
- 29th March (Tuesday): CB Consumer confidence March.
- 30th March (Wednesday): ADP Jobs numbers March, GDP Q4 of 2021
- 31st March(Thursday): Challenger job cuts March, Core PCE march, Personal income, and personal spending.
- 1st April (Friday): Nonfarm payrolls (March), ISM manufacturing.
US economy is very strong. I expect all March jobs numbers to come in on the higher side of expectation.
COMEX SILVER MAY 2022 (current market price $2508.20)
- Weekly Support: $2340.20, $2392.40, $2457.00, $2520.20
- Weekly Resistances: $2596.00, $2634.70, $2708.00 and $2782.70.
- Bullish View: Silver has to trade over $2457.50 to rise to $2782.50 and more.
- Bearish trend or silver will crash in case it does not break $2708.00 this week.
- Silver will also crash if it trades below $2489.30 this week any day in USA session.