-- Published: Thursday, 31 July 2014 | Print | Disqus
There were no surprises in the FOMC statement. The monthly taper has been reduced to $10 billion a month. Inflation will be the key going ahead. In my view for US interest rates on or before March 2015 (a) US employment growth has to maintain the current rate (b) US headline inflation has to trade over two percent for few months. If both these conditions are not met, then US interest rates could be shifted further by more than a quarter.
The ground reality which I get from my friends and others in the USA is that US hiring will continue to expand in the higher end of the expectation graph for the rest of the year and stabilize next year. But I do not believe that a one percent rise in interest rates by the USA and the UK next year should put gold and silver in the hand of bears. There are lot of other factors which will be there (for the rest of the year and next year) to prevent gold from moving into a long term bearish zone. Gold will trade in a $1040-$1230-$1430-$1656 range for the next one year. In the next two years as long as gold trades over $1040 the chances of a rise to $1930 will be very high. Bears will get worn out in case gold manages to trade over $1040 in the next two years. For now I prefer to be a fence sitter.
Higher global growth in the next eighteen months implies higher demand for silver. Silver is fundamentally very bullish. In the next two years as long as silver trades over $16.75 the chances of a rise to $50.00 will be very high. Initial resistance for silver is at $23.25.
TECHNICAL VIEW
MCX SILVER SEPTEMBER 2014 – prices in Indian Rupees below
Two weeks view: Silver can rise to 45100-47100 as long as it trades over 43300. Bearish trend will be there if (a) silver does not break 47100 in the next two weeks (b) Silver falls below 43300 any day.
Todays view: Silver needs to trade over 43700 to rise to 45100-45600. Jobbers in silver watch 44500 all the time.
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.
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NOTES TO THE ABOVE REPORT
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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
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-- Published: Thursday, 31 July 2014 | E-Mail | Print | Source: GoldSeek.com
