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Asian Metals Market Update: U.S. Inflation Data in Focus

What will happen to gold and silver just in case there is a sharp rise in US September inflation number?

  • A 1.00% rise in interest rates will start getting factored by the traders for 2nd November FOMC meeting.
  • US dollar index will rise further, bond yields will rise further while there will be another big sell off in rest of the asset classes all over the world.
  • Asian currencies including IDR and INR will see another big wave of depreciation versus the US dollar.
  • Spot gold will crash only if it trades below $1635.
  • Spot silver will crash only if it trades below $18.40.

I expect a fall in inflation in September and for the rest of the year. I have discussed the contrarian view so that we are prepared for any eventuality post CPI and PPI. Everyone knows the key resistances. No one really knows the price bottom or key supports.

A lower inflation will be bullish for precious metals, base metals and energies and emerging market stocks. US dollar index will form a medium-term top if PPI and CPI both of them fall significantly.

Spot Gold:

  • Key support: $1631.80 and $1648.00
  • Key intraday resistance: $1679.10 and $1700.00
  • Spot gold has to trade over $1648.00 initial support to rise to $1703.80.
  • Crash or sell off will be there if spot gold trades below $1648.00.
  • Gold will also crash if it trades below $1648 after 8:00 pm Indian time to $1599.60.

Spot Silver      :

  • Support: $18.70
  • Resistance: $19.54 and $20.01
  • Spot silver has to trade over $18.87 to rise to $21.03.
Spot silver will crash if it trades below $18.87 to $18.47 and $17.90.

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