History repeated one day earlier as last year last year gold and silver fell the next day after Akshay Tritiya. Demand from India was subdued as Indian consumer considers the price high. Bulls and bears are fighting it out in gold, silver and copper. The fight between bulls is not just in commodity markets but also in foreign exchange markets with bulls have the edge.
The scarce that China and Japan could raise interest rates earlier than expected resulted in profit taking which continued throughout yesterday. US equity markets managed to hold to the recent record highs which resulted in gold and silver paring some of the losses. Had US equity markets fallen, the fall would have been greater and sustained. China could raise interest rates soon to cool its growing economy while a rise in Japanese inflation could force Japan to raise interest rates earlier than September. Yesterdays fall clearly reflects the impact of China and Japan on global commodity markets. Traders are always on the look out for news related to slowing Chinese economy so that they exit base metals. Silver gets affected by fall in base metal prices. Expect greater volatility today and next week also.
Demand from India and Asia will be more in the form of investments as key festivals come to an end. Liquidity will be the driving force. It remains to be seen how long the US equity markets rally. Any sustained fall in US equity markets could adversely affect gold and silver. For the day a weaker US dollar is supporting the prices.
GOLD -- JUNE FUTURE
Gold needs to hold $683..20 to prevent further losses $677.10 and $672.80. On the higher side $695 - $700 zone is proving to be a tough nut to crack. A consolidated break of $700 will result in $730.00
COPPER -- MAYFUTURE
Copper needs to break $663 for $669.20 and $674.10. On the lower side $654.10 is the initial support with $643.70 as the key support.
Happy Profitable Trading & A Great Weekend.
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