Price behaviour in gold and silver and copper indicates that they will not see the usual cyclical summer bear market. Historically June to September months is a consolidation to bearish phase for precious metals and base metals. Election risk from the USA, UK, and France is the key reason for bullion to avoid a summer bear trend.
Historical heat waves all over earth have resulted in an equally historical demand for home cooling systems and industrial cooling systems. Solar power new installations are seeing an increasing pace everywhere. Copper and steel demand and industrial demand will only rise. The economic downturn (if any) will not alter the medium-term bullish trend and long-term bullish trend in industrial metals. Short-term flip flops will be part and parcel of the long-term bullish trend.
Interest rate cuts is something every trader is betting on and making investments. The way all asset classes are rising I suspect a reemergence of long-term inflation. 100 bps (one percent) to 150 bps (one and half percent) interest rate cut is expected by the Federal Reserve in the next eighteen months. An increase in global liquidity arising from interest rate cuts will create an unthinkable rise in the price of food and other survival expenses. Metals prices and their trends directly impact survival costs. Hyperinflation will be created if global interest rates are on a falling trajectory in the next eighteen months. Physical gold – and no other investment – is the best hedge.
Central bank chiefs believe that I have an interest rate weapon to get over a slowdown. Income inequality will zoom if central banks follow the interest rate weapon for all economic ills. My concern is rising income inequality in India and all over the globe. Local Barbarianism will rise against rising income inequality. State atrocities against the masses will rise. Child labor was there in an alcohol distillery in India. India’s human rights commissioner has called for Amazon warehouse labor practices near Delhi. Why are these large corporations able to exploit the masses? Rising income equality. Rising indirect taxes on goods used by masses in most countries. Gold and only physical gold is the best hedge against the multiplier effect of rising income inequality.
Spot Silver – intraday view (current price $30.44)
- Spot silver can rise to $31.36, $32.01 and more as long as it trades over $30.10.
- Mild sell-off will be there if spot silver trades below $30.10.
Disclaimer
- The investment ideas provided is purely independent view point and are solely for collective learning and for academic interests. There is no commercial benefit accruing or have deemed to accrue to me out of providing such investment ideas.
- The investment ideas shared here cannot be construed as investment advice or so. If any reader is acting on these advices, they are requested to apply their prudence and consult their financial advisor before acting on any of the recommendations made here. I am not responsible to anybody in the event of profits and losses (if any) upon acting on such advice.
- I hope that our reader is aware about this well aware of the risk involved in trading in commodity derivative trading.
Disclosure: I trade in India's MCX commodity exchange. I have open positions in India's MCX commodity future. I do not trade in CME future or OTC spot gold and spot silver.
NOTES TO THE ABOVE REPORT
- ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
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- PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
- THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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- ALL NEWS IS TAKEN FROM REUTERS NEWSWIRES.
- TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE
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