Asian Metals Market Update for 17th August 2023

Yen (USD/JPY) price trend impacts on all asset classes. USD/JPY is trading around 146.40. This is the key reason for the rise in bond yield and sharp rise in the US dollar index and falling trend in gold and silver.

Federal Reserve July minutes suggests that interest rate will be hiked in September meeting. This is now nearly one hundred percent factored in by the traders. Some traders are even placing bets on early November interest rate hike as well. (My view is a lower August inflation and lower August jobs hiring will cause a reversal in view change to pause from a hike for September Federal Reserve meeting. I expect inflation in USA to fall in the month of August due to higher base price effect among others.)

Spot gold falling below $1900 is not special and not new. The number of trading days spot gold trades below $1900 will need a close watch. All the price fall in spot gold till 15^th September will be part and parcel of the medium term bullish trend. I will be concerned on my medium term gold investment only if spot gold trades below $1840 for a long time. I will prefer to increase my short term investment allocation to gold around $1840.

If spot gold trades below $1900 for the rest of August, then $1840-$1850 will the first pit stop. Physical premiums in gold and silver are very high in India. Premiums will remain high or be in a rising trend till end of August. The festival of “Rakhee or Raksha Bandhan” on 30/31 August will see massive gifting demand of gold jewellery and silver jewellery in India. Premiums in gold and silver will fall or crash only if price trades with a falling bias in the first week of September.

China will continue to drag down copper and base metals unless global stocks rise and/or US dollar weakens or more stimulus measures are announced.

Spot Gold

• Daily support: $1870.90, $1882.40 and $1889.00
• Daily resistance: $1904.30, $1910.90 and $1924.90
• Spot gold has to trade over $1882.40 today and tomorrow on daily closing basis to try and rise to $1916.50 and $1939.60 (by next week)
• Crash or sell off will be there today if spot gold trades below $1890.

Spot Silver:

• Daily Support: $21.87, $22.19
• Daily Resistance: $22.66, $22.90 and $23.24
• Spot silver needs to trade over $22.19 to rise to $23.39 and more.
• Crash point is $22.19

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of Chintan Karnani. In no event shall I 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 mine 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.

Disclosure: I do not trade/invest in spot gold and spot silver and even in comex future.

NOTES TO THE ABOVE REPORT

1. ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
2. Follow me on Twitter @chintankarnani
3. PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
4. PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
5. THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
6. ALL PRICES/QUOTES IN THIS REPORT ARE IN US DOLLAR UNLESS OTHERWISE SPECIFED.