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Asian Metals Market Update



By: Chintan Karnani, Insignia Consultants

 -- Published: Monday, 7 July 2014 | Print  | Disqus 

Gold has remained firm despite all kinds of confirmation that global economic growth is here to stay. Physical demand for gold across Asia should rise from next week. The Hindu festive season will begin from 14th July and end in the middle of November. There will be some kind of Hindu festival coming up every fifteen days between 14th July and the middle of November (except between 17th September and 2nd October which is the shradh period). Ramzan Eid on 29th July will also result in higher gold jewelry demand in India. (Over the past few years, I have observed that there has been a huge increase in demand for consumer durables in India around the Ramzan Eid period.)

Gold – Delinking from interest rate expectation possible in the long term

Over the past few years, traders and investors are just focused on interest rates and inflation direction by the USA, the Eurozone and the UK. It is also one of the key reasons why gold prices have fallen from $1930 to $1179. The Federal Reserve can raise interest rates by not more half a percent in two installments next year. Does half a percent interest rate hike imply that gold prices will boomerang? I do not think so. After an initial interest rate hike, the Federal Reserve will wait for a lot of time for the next move. There will be big wild one way swings for gold if and when real interest rates start to rise in the USA. The US administration under Barack Obama and John Kerry have only increased the misery of the people in the Middle East and North Africa (MENA). John Kerry is a failed Vietnam War veteran and now his policies have failed in the MENA region. Gold will remain firm in the long term. The gold price manipulation which is being done by the Federal Reserve through Morgan Stanley and other “too big too fail” hedge funds cease to be effective in the next one year. People will realize that gold and metals have to be an important part of their portfolio. Gold in the long term will delink from changes in interest rate expectation and inflation expectation.

July to September period is a very crucial phase for the US economy in areas of business spending, consumer spending and hiring in all areas. Even if they stabilize in this period, one should expect higher interest rates by the Federal Reserve next year. I remain positive in silver in the long term. However I expect intraday volatility to zoom this quarter.

Gold has to break $1355 this week for another set of rise. In case gold does not break $1355 this week, then it will fall to $1296 and $1282 first.

It will be a technical trade with the US dollar as the key apart from Iraq risk.

Key US economic data releases this week

Wednesday: FOMC minutes

Friday: Federal Budget Balance

Copper and silver are set for a very big rise. I just hope they rise.

TECHNICAL VIEW

COMEX GOLD AUGUST 2014 – current price $1318.30

Bullish over $1316.00 with $1331.00 and $1342.00 price target

Bearish below $1305.00 with $1296.00 and $1287.00 as price target

Neutral Zone between $1305 and $1316

  • Gold needs to break $1331 for further gains
  • In case gold does not break $1331 by tomorrow, then it will fall to $1296 and below
  • There will be sellers if gold trades below $1316 either in the UK session or the US session

MCX GOLD AUGUST 2014 – prices Indian rupees below

14 day view: Failure to break and trade over 28300 in the next weeks will result in a fall to 26862-26793.

Todays view: Gold needs to trade over 27652 for further gains to 27802-27932. There will be sellers on rise as long as gold does not break 27652 to 27421-27269-26980,

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani

Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.

Trade without emotions

"Print this report only if absolutely necessary. Save Paper. Save Trees."

NOTES TO THE ABOVE REPORT

Follow us on Twitter @insigniaconsul1

UK session starts around 1:30 pm Indian Standard Time (+5:30 GMT) -- after the release of LME daily inventories

US session starts at 6pm pm Indian Standard Time (+5:30 GMT)

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.

APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT

COMEX GOLD – $15-$17

COMEX SILVER: $25-$30

COMEX COPPER: $3

NYMEX CRUDE OIL: $0.60

SPOT SILVER: $0.25

SPOT GOLD: $15-$17

THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT

Customer care: 9311139549

You can also mail your queries at insigniacommodity@gmail.com

Chat Id: mcxsuretips@gmail.com (gtalk), insigniaconsultants@yahoo.com (yahoo)

              (10:30 am to 5:30 pm Indian time, Monday to Friday)

 


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