The Ukraine situation it seems will worsen. The US president is using the usual threat of “trade sanctions or trade alienation” to both China and Russia. Russia wants talks on Ukraine. The USA indirectly is not showing any positive intent on talks. The usual propaganda war will continue for a few months before an armed conflict either before the US Senate elections in November or just after the US Senate elections (after November). Most successful Hollywood movies show that real villains are Russians and Heroes /good people are Americans. An armed conflict between USA and Russia before US senate elections will result in big majority for Biden and his Democratic party in US senate elections. At the end of the day, all actions and inactions by Federal Reserve and Biden will be directed to ensure that democrats control US Senate (in November elections). Gold and selected crypto currencies will rise. I am skeptical on inflation getting controlled by interest rate hikes as logistic challenges cannot be overcome by just increasing interest rates.
Trader sentiment for crude oil and energies overall is very bullish with almost everyone targeting $120+ (Nymex) in third quarter. I will prefer to invest in put options (in crude oil) for April, May and July futures as premiums are very low. There will be a direct correlation between gold and crude oil for the rest of the year.
China is closed unofficially from 27th January to 4th February. Position squaring and rebuilding will continue by Chinese traders till 27th January. Chinese traders will hedge in Shanghai metals exchange and other commodity exchanges if price of all metals continues to rise. Platinum has formed a multi-year bottom over the last two months.
COMEX GOLD FEBRUARY 2022 – current market price $1839.40
- Gold has to trade over $1831.70 to rise to $1856.50 and $1895.70.
- Key resistance is at $1856.50.
- Gold will crash to $1808.60 JUST in case it does not break $1856.50
COMEX SILVER MARCH 2022 – current market price $2420.30
- Silver can rise to $2498 as long as it trades over $2395.
- There will be a sell off if silver trades below $2395.00 in London.
NYMEX CRUDE OIL (March 2022) -- current market price $85.72
- Key resistance is at $87.20. Crude oil needs to break and trade over $87.20 to rise to $90.40 and $93.00.
- Crude oil will crash if it trades below $84.10.
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