Asian Metals Market Update for 6th February

Federal Reserve officials have pointed to large policy uncertainty around tariffs and other issues in the early days of the Trump Presidency. Chicago Fed President Austan Goolsbee warned that ignoring the potential inflationary impact of tariffs would be a mistake, whereas Richmond Fed President Thomas Barkin said it remains impossible at this early stage to know where cost increases from any tariffs might be absorbed or passed along to consumers. (copied from Reuters News)

MY VIEW: Inflation and hyperinflation fears will reduce any quick pace of interest rate cuts. US ten-year bond yields may not crash in a way traders expect. Interest rate hikes may be forced on the Federal Reserve and global central banks if Trump goes berserk in the upcoming twelve months. Either way, I will prefer to invest in gold and also increase investment in gold/silver if and when there are short-term bearish phases.

Currently, we are just worried about Trump and his expansionist tendency through trade tariff war and other measures. In the next few months, Trump and his rhetoric views will tone down one day. In such a situation gold prices can crash from the highs. In my experience, retail short-term traders make big losses whenever there is a big trend reversal (in any asset class). Gold prices may not crash in the immediate vicinity, but gold prices are vulnerable to a big crash in the next two months to four months. Investors need not worry an iota as, as on date, in my view spot gold will not fall below $2700.00 under the worst-case scenario. Short-term traders get damn scared if gold prices fall/rise by more than $50.00 any day. They tend to sell at the lowest and buy at the highest on days when the gold price falls/rises by more than $50.00. Let's be smart in the short-term trading/investing in gold. Avoid common mistakes in short-term trading.

Back to US January Nonfarm payrolls tomorrow. So far incoming US economic data releases show solid growth. February and March US economic performance will set the trend (of the US economy) for the rest of the year. US businesses will make changes to adapt to Trump's policies in the next two months. I would prefer to ignore tomorrow's US January non-farm payroll number from a medium-term investment perspective.

CME GOLD APRIL 2025 – current price $2887.70.

• TODAY’S VIEW: Gold April (2025) has to trade over $2875.00 to rise to $2928.00, $2961.60 and more.
• Sell-off will be there if gold April trades below $2875.00 after London opens and till the days close.
• Key support till tomorrow is around $2857.10.
• (The above 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

1. ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
2. Follow us 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.
7. ALL NEWS IS TAKEN  FROM REUTERS NEWSWIRES.
8. TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE