Asian Metals Market Update for 7th February 2024 – Chinese New Year Greetings to all

It is a wait and watch for traders of gold silver and copper. The trend is slightly bullish. But whether the reversal from Monday’s low is a bearish market rally or a real trend reversal to bullish will be known only by Friday. China taking urgent steps to prevent short selling in Chinese stocks should be a bullish sign for copper, zinc, aluminium, and silver. Gold rose as the price did not fall below $2020.

Short selling has been huge in China. Stock lending for short selling has been the norm for the past one year in China. But short selling is not advisable for the common man. Short selling is a way to con the common man if the same is against fundamentals. China has seen the Hindenburg moment for its stocks for the last one year. I am surprised as to why the same was allowed by comrade Xi. The lesson for retail traders is not the bet or trade against short sellers be it stocks or base metals or silver. The Gold-Silver ratio makes me believe that silver price should be at $25.00 minimum. Short sellers are preventing tooth and nail to prevent silver from breaking $25.00. Short selling is the reason why Spot Gold has yet to see a sustained break of $2100. Short selling is the reason why copper is not able to see a sustained break of $8750. In my view, financial regulators should keep a close watch on short selling. Short selling without any fundamental reason should not be allowed for any asset class. Short sellers of stock can take any nation to a ransom. The multiplier effect of short selling in stocks is a weaker currency versus the US dollar. A weaker currency due to short selling can become uncontrollable if the nation has low forex reserves. There is a negative economic shock if short sellers rule the stock markets the way they have been doing in China or the way they did with nickel in LME.

In the Chinese Year of Dragon, my portfolio allocation will be 50% medium term and 50% very short term for all asset classes. Highly profitable trading opportunities will be there for very short-term investments. I expect frequent “U shaped” price moves in the all-asset classes in the very short term. However long-term bullish trend will be unchanged for precious metals, base metals, rice, sugar and energies.

TODAY

There will be blips of big one-way price moves followed by long periods of consolidation. I am against short selling at current price in gold, silver and copper.

COMEX GOLD APRIL 2024 (current market price $2050.60)

• Key price to watch: $2049.30
• 50 day MA: $2039.00
• Gold April has to trade over $2039.00 to rise to $2067.60 and $2077.60.
• Mild sell off will be there if gold trades below $2045.00.

COMEX SILVER MARCH 2024 (current market price $2239.50)

• Key price to watch: $2244.00
• Silver March has to trade over $2224.30 to rise to $2271.30 and $2303.80 and more.
• Mild sell off will be there if silver March trades below $2224.30.
• Trend after 3:00 pm Indian Time is the key for comex silver March.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views o the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of the author and should not be consider7ed as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Prepared by Chintan Karnani Website www.insigniaconsultants.in.

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