-- Published: Monday, 1 December 2014 | Print | Disqus
The rejection of the Swiss referendum resulted in gold and silver crashing like a pack of cards. These are just early reactions to the same. The European session and the US session will be the key. Gold needs to trade over $1127 and silver needs to trade over $1465 to prevent further crashing. The slowdown in Chinese manufacturing growth will result in base metal prices also falling. Crude oil can fall to $56.60 in the short term as long as it trades below $67.60.
It is a big week. There is the all important US November nonfarm payrolls on Friday. US thanksgiving sales numbers will also affect investor sentiment. There is also the European central bank meeting on Thursday where they can spell another round of monetary easing. The world will be assessing the impact of India’s gold removal restrictions.
Impact Analysis: India scrapping golf 80:20 import rule.
India last week scrapped a rule mandating traders to export 20 percent of all gold imported into the country in a surprise move. The so-called 80:20 import rule tying imports to exports was introduced last year to bring down inbound shipments and narrow the current account deficit that had hit a record.
Our view: Tiny and small jewelers were miserably affected by the 80:20 rule. Their sales had been affected due to supply constraints. They had laid off a lot of workers. The jewelry sector workers are unorganized in India. There was massive unemployment of jewelry sector workers in India. With hopes of higher growth in the Indian economy for next year and the rollback of the 80:20 rule, there is hope that most (if not all) of the jewelry sector workers who had lost their jobs would get back their jobs.
Jewelers in India will be a happy lot. Ever since the rule was imposed every now and then law enforcement officials came to check if they had any smuggled gold with them or not. It was a pathetic situation for jewelers. Keeping smuggled gold is a nonbailable offence in India. Some of the jewelers had a hard time convincing the law enforcement official that the gold or gold jewelry in their shops and warehouses are not smuggled into India. In my view smuggled gold reached smaller cities and villages where law enforcement was less. Jewelers of the big cities were affected.
COMEX TECHNICAL VIEW
COMEX GOLD FEBRUARY 2014 – current price $1149.70
Bullish over $1155 with $1176.00 and $1204.00 price target
Bearish below $1136.00 with $1124.90 and $1098.10 as price target
Neutral Zone between $1136 and $1155
- There will be another wave of selling if gold trades below $1124 to $1098 and $1074. The UK session and the US session are the key.
- Gold needs to trade over $1155 in the UK session for pullback rallies.
MCX GOLD FEBRUARY 2014 – prices in Indian rupee below
Gold can fall to 25395 and 24960 as long as it trades below 26287. Initial support is at 25802.
NYMEX CRUDE OIL (1ST CONTRACT) - current price $64.75
Bullish over $67.00 with $70.20-$73.80 as price target
Bearish below $65.70 with $61.70 and $60.35 as price target
- Crude oil can fall to $60.35 and $58.51 as long as it trades below $67.00
- There will be another wave of selling if crude oil trades below $63.30 in the UK session today.
- Trade cautiously.
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: Monday, 1 December 2014 | E-Mail | Print | Source: GoldSeek.com