Short term investment demand and short term physical demand for gold and silver will depend on price trend of this week. There are fears that a global economic revival (as suggested by rising crude oil price) will result in higher bond yields and lower gold price. I am a contrarian. I believe that the current fall in gold price is short term but can continue at the most till Easter. I see another parabolic rise in gold price and silver price after Easter which will continue for the rest of the year. Buy some far dated call options in gold. I will prefer to buy November/December gold call options with strike price of over $2300.
Media and social media bias is against any short term gold price rise. This the best thing to happen. Gold and bitcoin prices both has crashed (in past years) when there was too much media attention on the price rise. Bitcoin and crypto currencies now attract reduced media attention and are rising like their day to reckoning has come. The same will happen with gold.
Bulk of our clients here in India are jewelers. Some of them have stocks which were purchased over Rs.52,000 per kilogram. They have hedged their stocks in futures. I will be advising them at the right time when to close their hedges and average put the physical gold stocks. (Every medium sized jeweler keeps some physical inventory. There will be physical gold kept as inventory at higher prices. Do not be surprised). I am also waiting for some more correction to close the hedge (against physical gold). I am keeping a hour to hour watch on gold price so that opportunity to close hedge is not missed. Indian gold price can form a long term bottom anytime.
China is closed from 11th February to 17th February. The world will be watching gold demand and silver (in all forms) in China during their New Year. Demand optimism has been factored in to a certain extent. Gold is holding onto to key long term technical support. Technical also suggest that the current gold price fall will be short lived.
COMEX SILVER MARCH 2021 – current price $2700.00
- Silver can rise to $3143 this week as long as it trades over $2597.70.
- Silver will crash only if it trades below $2597.70 this week.
- Invest in silver with a stop loss below $2481 for end of the month.
COPPER MARCH 2021 – current price $362.90
- Copper needs to trade over $356.40 till Wednesday to rise to $372.90 and $388.
- Copper will crash if it trades below $356.40 till Thursday.