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Asian Metals Market Update: The Federal Reserve Meeting

March 3, 2022

Federal Reserve will raise interest rates by 0.25% in its March 16 meeting. Now traders will not bother about surprises in Federal Reserve meeting. US ISM Non-Manufacturing (feb) at 8:30 pm Indian Time will impact bullion price.

Traders are focused on

  • Inflation and interest rates.
  • Ukraine and the potential to change long term political equations.
  • Global growth slowdown due to rising crude oil price and rising commodity prices.
  • Rise and rise of protectionism. Even Biden’s speech was full of protectionism.

Ukraine will vanish from the headlines before Easters. The scars will remain. Do not include Ukraine’s impact in the long-term investment portfolio. Ukraine’s impact will be felt between six weeks to ten weeks at the most. Thereafter financial markets will forget Ukraine and look for something else to worry and hurry.

There is a realignment of the portfolio. Stock traders are realigning the sectors. Global travel without any restrictions will be there soon. I still believe that the current fall in stock markets and all fall till end May (if any) will be a great long term investment opportunity.

The sum of the above is that, in the short term gold price is dependent on the ability/inability to break past $2000. In the next three weeks’ gold will see a boom-bust price moves. Gold is an invest on crashes strategy for the long term. Day traders, jobbers and short-term investors of gold have to be very careful.

Silver will rise or remain firm as long as industrial metals remain firm. Silver will rise quickly if it manages to trade over $26.00 anytime in the next two months.

Spot Gold:

  • Gold has to trade over $1939.10 to be in an intraday bullish zone and rise to $1953.70 and $1981.40.
  • Overall intraday gold is bullish as long as it trades over $1913.10.
  • Gold will crash by more than $80, if it does not break $1953.70 by Monday.

NYMEX CRUDE OIL (April 2022)  

  • A break of $114.30 will pave the way for $119.60 and $130.40.
  • Key support is at $106.50. Crude oil will crash if it trades below $106.50.

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