Asian Metals Market Update for 21st October 2024

October 21, 2024

Net long positions is rising in gold and silver with passing of each day. Net short positions in crude oil is rising with passing of each day. Copper is caught between short selling future trader and long term bullish investors. There is not an iota of doubt that copper price will be very high in twelve months from now.

Medium term Investment demand will continue to rise in gold and silver even if we see a rising trend this week. Short term hot money is there in gold and silver too.

There is no major US economic data release this week. Only some month end profit taking or pre US presidential election profit taking can cause a sharp, temporary correction in gold and silver. Once again we need to be very careful between 28th October and 19th December in our short term investment in gold and silver. One should look to book profit (before the sharp potential sell off ) and reenter (if there is a sell off as the sell off can be a for a few hours to a day or two.)

India’s demand will be high in the next two weeks. But if prices continue to rise till 31st October, then quantity wise sale of gold jewellery will be less. Silver jewellery and silver investment demand should take the shine of gold in India this Diwali.

Herd mentality or invincible bullish trend mentality has entered gold and silver. I will be very cautious in my short-term investment in gold and silver. BUT please differentiate and hold onto long term gold/silver investment and medium term gold/silver investment.

My experience is that whenever herd bullish mentality reaches invincibility, then prices crash when we least expect it. Another experience is that the so called invincible bullish trend can continue between thirty days to over eight months. A big bearish trend in gold and silver can come between April 2025 to June 2025 is case the bullish trend continues till March 2025.

A five percent to ten percent price fall from the highs will be called a mere correction. This so-called correction turns into a bearish trend if price trades below the highest price for a minimum three weeks. For example, spot gold reaches a high of $3000. Ten percent down from $3000 is $2700 will be called a correction. Now for a bearish trend spot gold has to trade below $3000 for a minimum fifteen continuous trading sessions to called a short-term bearish trend. If not corrections or dips will be a part and parcel of the ongoing bullish trend.

COMEX SILVER DECEMBER 2024 - View for the week 21st October to 25th October

Key weekly support: $3126.60, $3173.00, $3230.00 and $3314.00
Key weekly resistance: $3474.90, $3520.10 and $3716.90.
Silver December can rise to $3716.00, $4080.00 and more by 1st November as long as it trades over $3250.00.
A daily close below $3250.00 for a minimum three consecutive trading sessions is needed for a bearish trend in silver December.
Silver December will also crash if it does not break $3566.00 by 1st November close.

A warning to silver short sellers. Compared to gold, it less than less than one tenth of amount (of gold price) for a one percent price move. For example. If it needs $10 million for gold price to move one percent, then for silver price to move one percent less than a USD one million will be enough. If the whole world starts to chase silver, then the phrase “parabolic rise” will reflect a mild rise.

(the example given today are just hypothetical for concept purpose only.)

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