Gold and silver fell below the key long term moving averages and key retracement levels after the Federal Reserve chairman's semi-annual testimony. The Indian gold future price fell below Rs.30,000 after more than a year. There should be very good physical demand in Asia for gold. I am not very sure of higher silver demand in Asia. Gold premiums will rise. I am not writing off gold as an investment. I continue to believe that one should use the July and August fall in gold prices to invest in physical gold for the long term. I have never believed in gold ETFs as a way to invest and do not intend to change my views.
EU strikes free trade deal with Japan amid rising US protectionism
The deal is set to eliminate 99 percent of export levies on Japanese goods coming to the bloc with tariffs on European imports to Japan expected to remain at around 94 percent. The difference is due to temporary exemptions for culturally and politically sensitive products such as rice.
The deal will bring down the prices for European wine, pork and cheeses for Japanese consumers, while made-in-Japan machinery parts, tea and fish will become cheaper for Europeans.
Our View: The purchasing power of the US dollar is on the decline. The only alternate is gold.
Federal Reserve Chairman's semi-annual testimony
? Backs continued gradual interest rate hikes
? Policy challenge to keep inflation close to 2%
? "Best Path" is gradual interest rate hikes
Our view: The US dollar can gain and gold and other metals can fall further. The US dollar gaining trend can continue till the September FOMC meet. I expect a gradual US dollar decline after September's FOMC meet. The US dollar will decline only when the US economy shows forming a growth top and/or Eurozone or UK economic growth shows a long term bottom formation. Trade war uncertainties and its impact are unknown. In the short term the greenback can gain. In the long-term gold gains.
The testimony will continue today also. But key questions have been answered on the trend of US interest rates and the US economy. I do not think today's part will have any significant impact on the trend of the US dollar or gold and silver.
Economics & Trump trade wars
Incoming US economic data releases will be scrutinized for slowdown. Traders will be on the lookout for trade war related news or bilateral trade agreements between nations.
COMEX SILVER SEPTEMBER 2018 - current price $1559.00
Bullish over $1570.00 with $1596.00 and $1611.00 as price target
Bearish below $1561.00 with $1534.00 and $1512.20 as price target
Neutral Zone between: $1561.00-$1570.00
?,? 100% retracement is at $1514.50. Silver can fall to $1514.50 today if it trades below $1570.
? Silver needs to trade over $1570 to attract buyers.
? A daily close below $1560 today and tomorrow can result in $1434 before 31st July.
MCX GOLD AUGUST 2018 - PREVIOUS DAY CLOSE RS.29729
Bullish over 29929 with 30014 and 30186 as price target.
Bearish below 29805 with 29605 and 29331 as price target.
? There will be another wave of sell off below 29699 to 29550 and 29121.
? Trend is down.
? Gold needs to trade over 29929 to rise further.
(All prices are in Indian rupees above)
HAPPY PROFITABLE TRADING
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto 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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