Asian Metals Market Update: November-20-2017

I have seen very big moves in global financial markets in ‘Thanksgiving week’. I will be cautious this week. Silver gets the best week to rise and zoom. I expect short covering with every rise in gold prices. Speculation that some hedge funds are exiting crude oil long positions is preventing the rise. A strong US economy implies more guzzle for fuel during holidays.
Crude oil is not falling due to the crisis in Saudi Arabia. There is media speculation that developments in Saudi Arabia can result in crude oil prices doubling over a period of time. Further chances of US dollar dumping by Opec is also catching investors. Bitcoin and crypto currencies are now the future means exchange. Paper currencies are now the past. Americans will control the crypto currencies in the near future but their grip will not be the same as that of the US dollar. Gold will be the only key means of exchange between central bankers and large investors.
The political crisis in Germany should also be bullish for gold. The German chancellor declaring its failure to form a government can put the Eurozone into further crisis. Currency markets will be very volatile and will be dependent (too a large extent) on the political scene in Germany.

This post was published at GoldSeek on November 20, 2017.


Asian Metals Market Update: November-17-2017

Gold and silver are steady on increasing chances of the passage of the US tax cut bill. Resurgence in bitcoins and other crypto currencies is preventing investment interest in bullion. Short term hot money has moved to cryptos from bullion. The price moves in gold and silver are mainly dependent on physical demand and physical premiums in Asia.
In India I see more and more retail trading volumes in Industrial metals than gold and silver. This year’s rise in industrial metals has attracted brokers, retail traders and everyone alike. Aluminum was untouchable a few years ago and has attracted good trading volumes. Nickel’s recent breakout has also resulted more numbers of daily traders. Some of the head core silver traders have moved to industrial metals as it gives more profits than silver. A word of caution to industrial metal traders. The rise in industrial metals has been mainly on expectation that the global switch to electric vehicles can result in a long term shortage. But in my view traditional auto makers are making their vehicles more fuel efficient buy making engines from Aluminum instead of cast iron. The global switch to electric transport may not happen overnight. A sharp correction in industrial metals can happen anytime. Nickel has seen a very sharp correction over the past seven days. Other industrial metals could follow Nickel soon.
Traders will start taking positions for the first week of December from now. Geopolitical risk and political instability in the UK and some Eastern European nations can cause furor. Economic data releases from anywhere in the world will affect markets if and only if they indicate a slow down next year.

This post was published at GoldSeek on November-17-2017.