-- Published: Monday, 16 March 2020 | Print | Disqus
Gold rose to high of $1574.80 and silver rose to a high of 1524.50 after the Federal Reserve slashed interest rates to near to and pledged hundreds of billions of dollars in asset purchases. Interest rate option is also now over for the Federal Reserve after this interest rate cut.
There is more or less a global lockdown. There was a mad rush for cash. Traders and investors alike sold everything which could generate cash. Gold had a historical week. Silver plunged. Copper and industrial metals fell but far from being called a plunge.
The more the corona virus spreads, the less are the chances of a “V” shaped global recovery. I expect a “U” shaped recovery. Central bank money printing machine will fail if the corona grips USA and India like Italy or china.
Last week paper assets and paper currencies busted taking a toll on gold. Euro. Yen, pound all sold off against the US dollar. US dollar Index gained as there is a belief that damage to US economy will be far less than Eurozone, UK, Japan or any other nation.
In India and world over there is closure of mass gathering till end of March. If the spread of the corona virus peaks by the end of March, then sharp dips (till 31st March) in gold, silver, crude oil and industrial metals should be used to invest for year end and next year.
If corona virus spreads beyond March globally into Easter then the world will be a graveyard and a long term recession will be in the offing. Gold will only rise.
Lesson learnt from last week plunge: Excess leverage in an investment class is bad for investment health. Invest in stocks, bonds or any asset class which have very strong fundamentals. Fundamentally strong investment recovers much faster than weakness one. But fundamentally strong asset class can give less investment returns. Gold is still fundamentally strong as compared to other asset class.
Everyone is talking about gold. After last week’s slide, no one will dare invest in silver. Gold-silver price are near parity never seen in before.
COMEX SILVER MAY 2020 – current price $1470.30
· Crash will be there if silver trades below $1425 to $1366.
· A daily close below $1425 today, tomorrow and Wednesday can result in silver falling to $1160.
· Highly oversold.
NYMEX CRUDE OIL (April 2020) - current price $31.64
· I am against new selling in crude oil unless it fall below $29.90.
· Trend is down. But there can be sharp pullback rallies.
· Watch $31.00. Crude oil can move $5 either side from $31.00.
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. All analyses used herein are subjective opinions of the author and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Websitewww.insigniaconsultants.in. Prepared by Chintan Karnani
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NOTES TO THE ABOVE REPORT
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-- Published: Monday, 16 March 2020 | E-Mail | Print | Source: GoldSeek.com