“Retaliatory Trade Tariff” can now be the key theme for the rest of the month. Incoming US economic data releases may lack a sustained bite due to the unknown economic impact of the “Retaliatory Trade Tariff”. Gold and silver will rise, albeit with small correction and larger price consolidation.
TRUMP SPEECH TO US CONGRESS
- Trump says his “new trade policy” will be great for American farmers.
- Trump again pledged to create a "gold card" that would offer a path to citizenship to foreigners willing to pay $5 million. "It's like the green card, but better and more sophisticated."
- Trump said he would announce reciprocal tariffs on April 2, matching barriers in other countries.
- Trump said he was calling for "no tax on tips, no tax on overtime and no tax on Social Security benefits for our great seniors.".
- Trump promised to balance the federal budget.
In my view, Trump's speech is bullish for gold and silver. The America First policy implies (X) hyperprotectionism for American corporations (XI) and the trade tariff war, including the reciprocal trade tariff war.
Short-term volatility will rise in all asset classes as traders will reassess the economic impact of the “America first policy”. Trump's changes are being experienced globally for the first time after many decades. The economic impact is unknown. The geopolitical impact is unknown. Physical gold is the safest hedge. Crashes (if any) will be short-lived (like last Friday) in gold and silver.
In India, I am seeing small layoffs by American companies as a part of placating Trump. These jobs will move back to the USA. This is just the beginning and not the end wherein jobs move back to USA from India and other Asian nations. American corporations' costs will increase significantly if outsourced jobs (from Asia) move back to the USA.
SPOT GOLD – current price $2912.00
- Spot gold has to trade over $2891.00 to rise to $2937.70, $2962.00, and more.
- Sell off will be there if spot gold trades below $2891.00 after London opens and till day's close.
- Spot will also crash if it does not break $2937.70 and also trades over $2937.70 by the 12th (this is just a technical view.)
- Views are intraday.
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 NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
- 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
- ALL PRICES/QUOTES IN THIS REPORT ARE IN US DOLLAR UNLESS OTHERWISE SPECIFED.
- ALL NEWS IS TAKEN FROM REUTERS NEWSWIRES.
- TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE
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