-- Published: Wednesday, 25 March 2020 | Print | Disqus
Why is there such a huge gap between spot price and future price in gold/silver?
1. Mines are closed or closing. There will be no new supplies.
2. Global lockdown is preventing physical gold and silver to be transferred from one nation to another.
3. Lack of alternate safe investment avenue and availability of free money to fund managers and large corporates has resulted in short term hot money moving into gold, silver, palladium and other metals.
4. European and Americans are buying physical gold. Till 2019, Europeans and Americans mainly invested in gold futures and gold ETF.
5. Lack of physical demand from Asia (due to closure) is being more than made up from demand from Europe and USA.
6. Chinese are buying physical gold and physical silver. China will be working fully or normally from next month. However there is no official confirmation of the quantum or extent of buying.
7. Rise in gold price has accelerated gold investment demand.
8. Silver investment demand is also rising as there is view that silver prices have bottomed out. One will never get sub $12.00 price anymore in history in silver. (in my view).
There is hope and expectation that corona virus infections in Europe will be top out in the next two weeks to three weeks. China will be working normally without any internal border controls in the next two weeks to three weeks. BUT USA, India and rest of the world will see the corona virus infections and deaths starting to rise. Whenever Europe and China industrial activity starts to work normally, there will be a mad rush to buy industrial raw materials like, copper, zinc, nickel, lead etc. Prices will rise. Future traders will spruce up prices of industrial metals on hope of very good demand for industrial metals demand on or from the next second week of April. The risk is that corona virus continue to make havoc in Europe just before Easter.
COMEX SILVER MAY 2020 – current price $1452.00
· Silver can rise to $1580.60 and $1644.80 as long as it trades over $1400-$1410 zone.
· Corrections upto $1360 (if any) should be used to invest in silver for next month.
COMEX COPPER MAY 2020 – current price $218.40
· Copper is bullish and can rise to $230 and more as long as it trades over $207-$211 zone.
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: Wednesday, 25 March 2020 | E-Mail | Print | Source: GoldSeek.com