-- Published: Tuesday, 26 August 2014 | Print | Disqus
China and India are the biggest consumers of gold and silver. Their demand has fallen due to a slowing economy and better alternate investment elsewhere. I expect a pickup in Chinese and Indian gold and silver demand between September and February 2014. Gold and silver are fundamentally bearish for now. Unless there is a sustained recovery in Asian (excluding Middle East) demand, there will be blips of big spikes in prices with an overall bearish trend.
Investor sentiment towards gold
Yesterday I met a close friend of fine (a chartered accountant by profession) working in Dubai for the past ten years. He had been an avid physical gold investor over the past ten years. His last investment in gold was around $1500. He is so frustrated by the inability of gold prices to rise that he now swears that he will never invest in physical gold. He believes that gold prices will never be able to rise to $1500. His woes are further accentuated by the continued rise in Indian equity markets where returns are far better than gold and silver investment. This is not just my friend’s attitude towards gold investment this is the perception of most of the gold investors globally. He believes that since gold has not risen in the past nearly two years, it can never rise. My view to gold investors is that they need to have patience for another twenty four months. If you do not have patience then use every rise to exit gold investment. I believe that once Barack Obama and his masseur John Kerry leaves office gold and silver will see another big never before seen parabolic Bull Run. The USA and its NATO allies will not be able to manipulate gold prices from 2017. (I personally believe that still there has to be some percentage in hard assets).
Investors are even more frustrated by the continued fall in silver prices. They intend to use every rise to offload their physical silver investment. My advice to the long term silver investor is the same, use the fall in silver prices till end 2016 to invest for 2019. However one needs to wait for some more time to invest in silver prices as a long term bottom is yet to be formed.
Technically gold and silver are bearish. Momentum is also bearish for gold and silver. US economic data releases suggest a sustained economic growth. Once the Federal Reserve starts raising interest rates there should be a big gap between the first half percentage hike and the next half percentage hike.
COMEX SILVER SEPTEMBER 2014 – current price $1933.50
Bullish over $1949 with $1967 and $2003 as price target
Bearish below $1917 with $1901-$1877 as price target
Neutral Zone between: $1917-$1949
- Silver needs to fall below $1917 or break and trade over $1959 for direction
- The region between $1915 and $1940 is a difficult zone to trade for the day traders.
- Jobbers watch $1927
MCX SILVER SEPTEMBER 2014 – prices in Indian rupees below
Short term View: Key long term support is at 41259 and only a daily close below 41259 for four consecutive days will result in a crash to 39465-38360 and 34646.
Today silver needs to trade over 41700 to prevent a sell off.
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: Tuesday, 26 August 2014 | E-Mail | Print | Source: GoldSeek.com