Investors are not taking any fresh positions in precious metals or base metals due to high volatility. Instead those who are stuck are higher levels are trying to average to average it out and exit. This is a natural phase which will continue for some time, before a consolidation phase followed by a direction. Arbitraging between different commodity exchanges is also reduced due to high volatility in currency markets. Once there is stability in currency markets volumes will also increase and new investment should be there in precious metals and base metals will also increase. Copper and silver September futures are expiring this month and bears will try to ensure a lower close as there are more long positions than short positions.
Investor appetite for risky investment has topped in the medium term to long term. Gold, silver and precious metals are the least risky investment. They will benefit sooner than later as investors scramble to search for less risky investment. Equities have always been the favourite of every investor. Sooner than later precious metals will find a place in them. Indian have been investing in gold for centuries, hopefully investors of developed nations will realize this.
Gold and silver are not out of the woods yet. They will get chopped between crude oil, US dollar and equity markets. Gold is being supported by demand at lower levels.Physical silver demand should start to rise at lower levels as traders increase inventories before the festive season.
GOLD -- DECEMBER FUTURE
Gold needs to hold 400 day MA of $658.80 to prevent further losses to $650.0 and $644.0. On the higher side the earlier support of $668 and $676 are the resistances. Initial support at $663.10
NYMEX CRUDE OIL --FUTURE
100 day MA of $67.16 is the key support. Resistance at $73.75.
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