Traders and investors in India are very bullish on gold and silver today. They expect gold and silver to zoom after the European central bank meeting. There will be good demand in futures as well as physical market in India today. Monetary easing by way of interest rate cut and new bond issuances is expected by the ECB today. Outlook by the ECB will be the key. Eurozone economy at the moment is in shambles. I am not sure whether only monetary measures can contribute to growth, jobs hiring and higher retail demand. Do not expect overnight results. But remember all the extreme forms of pessimism has been factored in by the traders.
Technically gold needs to trade over $1480 till 19th September to rise to $1630 and more. Crash or sell off or short term bearish phase will be there only if gold trades below $1480. Silver needs to trade over $1760 till 19th September to be in short term bullish zone and target $2032. Crash in silver will be there if silver trades below $1760 for the rest of the month.
Bond yields will continue to play a big role in dictating gold prices. Retail investors or herd as I call them, are buying on dips in gold and silver. Indian media is filled with forecast of Rs.50,000 and more per (per ten grams) in gold by the year end (current physical gold price is around Rs.38700). Indians will be using falls in gold to invest as if they will never get the price in their life time.
Trump has postponed extra trade tariff on some Chinese goods by two weeks. Trade war is not yet over. It in my view will continue and be the key theme in next year's US presidential elections.
COMEX GOLD DECEMBER 2019 - current price $1500.70
? Gold needs to trade over $1487-$1492 zone to try and rise to $1528 by tomorrow.
? Crash or sell off will be there below $1492.
? Trend is neutral.
MCX GOLD OCTOBER 2019 - previous day close Rs.37974.00
? Gold needs to trade over Rs.37799 till Monday to rise to 38200 and 38909.
? Crash will be there only if gold trades below 37799 after the European central bank press conference.
(prices are in Indian rupees above)
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