-- Published: Tuesday, 7 November 2017 | Print | Disqus
Higher crude oil prices are supporting gold and silver. Gold and silver have always flourished in an inflationary environment. Focus will shift to inflation. If crude oil prices continue to rise then one should use sharp dips to invest for the short term. I see a direct correlation between gold prices and crude oil prices. Trump’s South Korea visit and China visit will be closely watched. Ways to deal with North Korean nukes will affect gold and silver prices.
Rising crude oil prices can change the balance sheet of emerging markets like India. Governments will be caught between the choice of fiscal management and inflation management. Most of the emerging markets have enough reserves to withstand an energy shock. I see emerging market currency weakness, if Nymex crude oil continues to rise to $80 and consolidates at $80. Under the current scenario crude oil looks headed for $100 in the next twelve months as long as it trades over $46. Emerging market stock markets will form a medium term top and could move into a bearish phase if crude oil prices rise and consolidate around $80. As long as crude oil prices do not break $80, emerging markets are in a safe zone.
Historically crude oil prices have always zoomed under republicans. The current rise in crude oil price is an early signal of history repeating itself.
COMEX GOLD DECEMBER 2017 – current price $1280.10
Bullish over $1275.50 with $1291.40 and $1296.30 as price target.
Bearish below $1270.40 with $1264.60 and $1257.30 as price target.
Gold can rise to $1296.30 as long as it trades over $1270-$1275 zone.
There will be another wave of rise if gold manages to trade over $1282.
MCX CRUDE OIL NOVEMBER – previous day close Rs.3691
·Initial resistance is at 3715. A break of 3715 will result in 3756 and 3850.
·On the lower side as long as crude oil trades over 3633-3655 zone, downside risk will be limited.
(prices in Indian rupees above)
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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