Asian Metals Market Update: In A Trading Range

August 26, 2021

Overall gold, silver, and copper are trading in a range. Apart from the central bankers meeting at Jackson Hole, there is US Q2 GDP and Q2 real consumer spending. There will be very sharp two-way price moves in all metals and forex. Crude oil is bullish. Asian currencies will be choppy due to month-end factors and fear of surprise in the Jackson hole conference. Get ready for a three percent one-way price move in all metals and energies.

“Taper Timing” will be known by Saturday or at the latest by 3rd September (US August nonfarm payrolls release date). (A) Early taper from November gold will sell off first. (B) Delayed taper December or January then the gold price will break past $1900 in September. Gold has been trading in $1650-$1950 wider trading range this year. This $300 trading range will be broken in the next seven weeks and a new trading range be formed. Silver remains undervalued. Silver is a buy on crashes strategy for me (even if early taper is announced).

A bit on cryptocurrency investment

Cryptocurrencies are an asset class. They will be one of the best performers in the next decade. But I have a doubt in my mind? What is the basis for issuance of a new cryptocurrency? Every day a new cryptocurrency comes in the market. Overhype with crypto assets gives the newly issued cryptocurrency 5X to 100X times rise in a few months. Absolutely absurd rise is there. Unlike bitcoin and ethereum one cannot use them for their needs. These newly issued cryptocurrencies are also illiquid. I am writing this because I come across people (in India) who tell me every now and then to invest in so-called new cryptocurrency. They tell me that if I hold it for a few years I will get a 1000X return. This is how common man is trading and investing in cryptocurrency in India. This means that anyone can launch a Ponzi scheme by just issuing a new cryptocurrency. Why dupe people directly when I can launch a new cryptocurrency without the law touching me. People are not treating cryptocurrencies as an investment. Newly issued Cryptocurrencies are basically a slot machine. Please be careful while trading and investing in newly issued cryptocurrencies. Bitcoin Ethereum, dogecoin, and some other cryptocurrencies will not vanish. Most will vanish in the next three years. Do not be a cry baby. Be an alert baby. One should also marginally increase his allocation to physical gold even at the current price. Non fungible token (NFT) are for the art collector type investors and not for traders.

Comex Gold December (current price $1787.25)

  • Gold has to trade over $1777-$1780 zone till tomorrow to rise to $1814.10.
  • Gold will crash only if it trades below $1777 to $1756.10.
  • Gold needs a daily close over $1790 today and continuously till Tuesday (31st August) to be in a bullish zone in September.
  • I am against new short-term investment in gold at current price. I will prefer to wait till Monday and then decide.

MCX Silver December (current price Rs.63830.00)

  • Silver can rise to Rs.65806 and Rs.67002 by next week as long as it trades over Rs.62400-Rs.62600 zone.
  • Immediate support is at Rs.63396. There will be sell-off  only if silver trades below 63396 after US Q2 GDP numbers.
  • Silver will rise very quickly to 65009 if it manages to trade over Rs.64036 till tomorrow.

(prices are in Indian Rupees above).

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China has only 2% of its Total Foreign Reserves in gold.

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