6th February: Asian metals market update

Insignia Consultants

New Delhi

Tuesday, February 06, 2018

TIME 7:40 AM IST                         

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ASIAN METALS MARKET UPDATE

Gold rose due to safe haven demand on the plunge in global stock market plunge. Gold gained despite a strong US dollar. If gold rises today, then there will be short covering. A lot of short term traders are short. One needs to remain on the sidelines in gold and silver. In case of extreme margin money pressure in stock markets, some of the long positions in precious metals and industrial metals could get liquidated.

One thing I know is that bottom fishing never works whenever anything falls.  A week’s fall in global stock markets is an investing opportunity. Short term bearish trend will be there if global stocks markets continue to fall into next week (around Valentine day). If you are sitting on cash, keep a close watch on the stocks you want to invest. Proper stock selection is the key. This is the reason why I prefer everyone to invest in physical gold in small percentage. The value of your stock investment can fall fifty percent under a rout. I do not think gold prices will fall fifty percent under any price crashes in the next few years. There may be times when gold investment returns may not cover real inflation. Safe havens asset classes have very low returns with almost zero chances of capital erosion.

If USA stock markets fall today also, then last night slide could be just the tip of the ice-berg. Buyers and investors will vanish. Margin squeeze could result in more sell off in stock markets. The upcoming twenty four hours is very crucial for global financial markets. Global economy is fundamentally strong. There is nothing to worry. US, Eurozone, China, India, Japan and most nations have rising growth numbers.

COMEX GOLD APRIL 2018 – current price $1345.60

Bullish over $1339.10 with $1351.10-$1357.70 and $1374.40 as price target

Bearish below $1329.10 with $1323.90-$1321.10 and $1312.80 as price target.

  • Gold needs to trade over $1339 today to rise to $1357.70 and $1374.40.
  • Sell off will be there if gold falls below $1339.
  • Trade very carefully between $1329-$1339 zone.
  • Be prepared for $25 sudden move either side anytime.

US DOLLAR-INDIAN RUPEE (inter-bank) – current market price Rs.64.3650

  • 100 day moving average is around Rs.64.3800.
  • Usd/inr can rise to 64.6100 and 64.9700 as long as it trades over 64.2500.
  • Immediate support is at 64.2500 with 64.0725 as key support.

NYMEX CRUDE OIL (1ST CONTRACT)  – current price $63.36.

Bullish over $64.30 with $65.80-$66.90 as price target

Bearish below $63.70 with $62.80 and $60.90 as price target

  • If global stock markets continues to fall, then crude oil will fall to $60.20.
  • Crude oil needs to trade over $64.00 to rise.

HAPPY PROFITABLE TRADING

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto currencies, metals and commodities reflect the views of 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. Prepared by Chintan Karnani

Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.

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NOTES TO THE ABOVE REPORT

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UK session starts around 1:00 pm Indian Standard Time (+5:30 GMT) — after the release of LME daily inventories

US session starts at 6pm pm Indian Standard Time (+5:30 GMT)

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

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