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Asian Metals Market Update: Waiting for Jerome Powell

Investors await a speech by Federal Reserve Chairman Jerome Powell on Thursday, when he is expected to address the U.S. central bank’s view on inflation and monetary policy. Thursday/Friday can be a make day or break day for bullion bulls and US dollar bears.

The US dollar bearish factors are (i) Improvement in German business morale (ii) German coalition parties agreeing to extend measures to cushion the effects of the coronavirus crisis on Europe’s biggest economy, including prolonging a short-time work scheme and a freeze on insolvency rules. US politicians are still haggling over extension of stimulus cheques. (iii) U.S. consumer confidence dropping to a more than six-year low in August.

US dollar bullish factor is the first formal dialogue between top U.S. and Chinese trade officials since early May.

Our view: Any sustained reduction in US-China trade war can result in more correction in gold and silver price. Gold does have a US-China trade war premium.

The sum of the bullish and bearish US dollar factors is that it will be a technical trade till tomorrow. Gold can see pullback rallies to $2000+ as long as it trades over $1885-$1905 wider range. Silver can see pullback rallies as long as it trades over $25.50.

US economic data releases till Friday will also impact bullion and US dollar Index. Copper and Nickel are firm on news of mine worker strike news in the world second largest mine in Indonesia. Copper and nickel will remain firm as long as this issue remains.

Hurricanes in the Gulf of Mexico is the only reason for crude oil prices to rise. It is buy on sharp dips strategy for crude oil.

COMEX GOLD DECEMBER 2020 – current price $1934.00

  • Key short term support is at $1893.00. Gold needs to trade over $1893.00 till next week to rise to $2055.
  • Short term bearish trend or a quick slide will be there if gold trades below $1893.00 anytime till next week.
  • Today gold needs to trade over $1947 to be intraday bullish. Gold will test $1893.00 in case $1947 is not broken. There will be big one way price moves.

COMEX COPPER SEPTEMBER 2020 – current price $294.83

  • Trend is bullish.  If copper rises till Friday then chances of $303.30 will be very high.
  • Corrections upto $288 will be a part of the bullish trend.
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