Asian Metals Market Update for 14th April 2023
- Comex Copper has moved into backwardation. Backwardation is always bullish for price. (When near dated future is higher than far dated future, it is called backwardation.)
- Watch $2056 in spot gold. It can move $65 either side from $2056.
- Look for signs of weekend profit taking just before US opens or just after US opens. (between 5:00 pm Indian Time and 7:00 pm Indian Time.)
Technical breakout and a weaker US Dollar is the reason for the rise in gold, silver and copper. Spot silver has to trade over $26.00 today and next week to attract a rally to $28.50 and $30.00. Since 2020, spot silver has not been able to trade over $26.00 for a very long time. Spot silver, if it somehow manages to trade over $26.00 till 10th May, will zoom to $40.00 by end June. Watch $26.00 all the time.
Technical breakdown in the US dollar Index is the part reason for a technical breakout in gold, silver, and copper. Continuing weekly jobless claims yesterday indicated that the US jobs market could be in a cooling period. US April nonfarm payrolls (due on 5th May), should be below 150,000 along with a rise in unemployment rate. Traders have factored in a 0.25% interest rate hike in the European central bank meeting on 4th May. US dollar is loosing the interest rate arbitrage and hence expectation of more weakness over the coming weeks and months.
The big question is “Will precious metals and base metals continue to see a one way rise if the US dollar Index sinks or move into a medium term bearish zone?”. Sentiment and momentum is very bullish for gold and silver. Beyond a particular price point say $2300 for gold and $30.00 for silver, there will be a disconnect between inverse correction US dollar Index and precious metal price. It is not all darkness for the US economy. Europe and China economic growth is seeing some economic sunshine (from darkness of the past two years) is the reason for the greenback to fall this year. After this summer, the US dollar should start its period of gains.
Spot Gold
- Daily support is between $2006 and $2023.90
- Daily resistance: $2056.90 and $2073.20 and $2090.90
- Spot Gold has to trade over $2023.20.00 to rise to $2073.20 and $2106.00.
- Mild sell off will be there is spot gold trades below $2036.00
- Crash or sell off will be there if spot gold does not break $2073.20 by Monday close to $1972.80 and more.
Spot Silver:
- Daily Support: $25.26
- Daily Resistance: $26.16 and $26.57
- Spot silver has to trade over $25.80 to rise to $26.90 and more.
- For a quick rise spot silver needs to break and trade over $26.34 today and whole of next week to zoom.
- Watch $26.34. Spot silver can move $3.00 either side from $26.34 before 28th April.
About the author
