Asian Metals Market Update for 27th November

November 27, 2024

The US November Core PCE inflation number is the key for gold silver and copper and bond yields and the US dollar index. A lower inflation number is needed for an interest rate cut at the 18^th December meeting. I have a divergent view (on interest rate cuts) regarding market positioning. I am expecting an interest rate cut of 0.25% next month. Market positioning stands for less than a twenty percent chance of an interest rate cut at the 18^th December Federal Reserve meeting.

FOMC Minutes

Federal Reserve officials appeared divided at their November meeting over how much further they may need to cut interest rates, but as a group, they agreed to avoid giving much guidance from here on about how U.S. monetary policy is likely to evolve.

There was uncertainty about the direction of the economy, Fed officials noted, according to the minutes of the November 6-7 meeting, uncertainty about just how much the current level of interest rates was doing to restrict the economy - a key issue in deciding how much further rates should fall - and a developing case to step carefully.

"Participants noted that monetary policy decisions were not on a pre-set course and were conditional on the evolution of the economy and the implications for the economic outlook ... They stressed that it would be important for the (Federal Open Market) Committee to make this clear as it adjusted its policy stance," the minutes stated, referring to the central bank's policy-setting committee.

(The above has been copied from Reuters News.)

MY VIEW ON FOMC: Incoming US economic data releases like NFP or jobs and inflation numbers and inflation trend will be the deciding factor for interest rate cuts next month and in 2025. Fundamentals of the US economy will decide on the pace of the interest rate cut and not the actual interest rate cut. Back to square one. The first week of every month and the last week of every month can be trend-changing. Short-term investors need to be extra vigilant in the first week of every month and the last week of every month. (till the end of 2025).

Trade carefully. Preferably do not leave any open positions for Friday and next week. I will be cautious about the Middle East despite the Israel-Hamas-Lebanon peace accord. History says it has never lasted. A peace accord has been used to regroup and rearm (for future attacks.)

SPOT SILVER - Current Market Price $30.53

TODAY VIEW: Spot silver needs to trade over $29.90 to rise to $31.16, $31.90 and more.
Crash or sell-off will be there only if spot gold trades below $29.90 in the USA session and more so after 8:30 pm Indian Time and till days close.

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