Commodity Trade Mantra

Silver, Crude Oil & Gold Prices – The Sultans of Swings.

Gold Prices – Sultans of Swings.

Silver, Crude Oil & Gold Prices – Sultans of Swings.

Gold Prices have shot up last week on an increased likelihood of further Money Printing by the US Fed. Declines in Silver & Gold Prices will relatively be well supported due to the Market’s fixation on a fresh round of Monetary Easing expected from US, Europe & China. Silver, Crude Oil & Gold Prices Expected To Swing Wildly in the coming 20 days.

September would prove to be a critical month for Gold Markets. Silver & Gold Prices weakened exactly as alerted yesterday after the Initial upside Euphoria. Given yesterday – Gold Trading along with Silver & other Base Metals can now be expected to remain relatively subdued till Tuesday night & is expected to again pick up momentum from Wednesday onward.  Read more on:  MCX Gold Trading Hits Record Rs. 31,091 – MCX Silver Prices Rise to Rs. 58,445.

Silver & Gold Prices along with Crude Oil & Base Metals may all see Volatile See-Saw swings on events scheduled for the next 20 days. The Upside & Downside swing triggers are mentioned below.

  1. Downside momentum from Monday till Tuesday night as no major Economic Data also expected to be released in these 2 days, except the German IFO Business Climate Index on Monday & the German CPI (Quarterly & Yearly Basis) on Tuesday. Sporadic movements in Silver and Gold Trading may be seen on news & developments on the continuing European woes, which could mostly trigger downside movements in Gold Prices. Spanish Prime Minister Mariano Rajoy’s austerity drive will intensify this week as a sales-tax increase tightens the squeeze on consumers whose spending is already plummeting. Gold Trading may see a small decline on negative news emerging from the Eurozone. – Downside Trigger
  2. Important Quarterly US GDP numbers on Wednesday – May provide some upside as nothing earth shatteringly well is expected. – Upside Trigger
  3. More importantly the Initial Jobless Claims coming in on Thursday – May trigger some softening if numbers remain positive.  – Downside Trigger
  4. Comex Silver Futures for September delivery entering contract closing week may also keep market movements extremely volatile, as short covering in large upside movements, may trigger further forced buying. – Upside Trigger
  5. Finally for the week, the ever crucial news on Fed Chairman Ben Bernanke’s conference from the Jackson Hole symposium on Friday 31 August. Gold Prices may see sharp rises on hopes of having the announcement of the timing of the QE3. Possibility of QE3 will keep the US dollar under pressure. – Upside Trigger
  6. If the Fed does not give any hint or clarity on the timing of the further easing (QE3) this Friday, Gold Prices may sharply correct, but in the coming week. – Downside Trigger
  7. There can be fireworks in Gold Prices on Monday next week, as Bernanke’s speech this Friday comes on 31 Aug (which is a contract closing day for Silver, Copper & other Base Metals) with a long weekend holiday for the U.S. markets – Labor Day on Monday 3 Sep. – Downside Trigger
  8. Very High hopes from the ECB policy meet on Sep 6 to contain Eurozone crisis, will again trigger upside movements in Gold. – Upside Trigger
  9. There are high expectations from China. Base Metals have risen despite a softer Chinese economy, reflecting a view that weak data will trigger a more aggressive policy response. The PBOC – People’s Bank of China is expected to reduce bank reserve requirements and interest rates, with the government likely to implement fiscal policies to boost economic growth. – Upside Trigger
  10. Uncertainty mixed with hopes about the U.S. monetary policy will continue until the Sept. 7 jobs report. –Neutral View till announced.
  11. Hopes about the U.S.monetary policy could continue right up to the Sept. 13 FOMC meeting also. – Upside Trigger
  12. India’s Gold Demand has remained fragile on Record high Gold Prices in India due to the massively weakened INR, but peak period for Indian Gold consumption starting September till December may witness some festive season buying– Upside Trigger
  13. Physically backed Gold ETFs are up more than 40 metric tons in August to set record highs. – Upside Trigger
  14. Gold Prices have Historically been at the year’s highs during the September to December periods.– Upside Trigger

Upside Trigger for Gold Prices – Crude Oil has more Reasons to Rise:

Crude Oil also rallied along with Gold, Silver and the Euro to its highest in three months last week on the NYMEX, mostly from the market’s expectations of Fresh Eurozone bailouts and a third round of Quantitative Easing from the U.S. Fed. Crude Oil supply concerns persist due to the Irandispute & tensions in Syria, partly also due to the recent refinery fires and also the closing of some refineries in the Northeast. Iranis yet finding plenty of buyers for it’s Oil production as reported by Reuters, despite imposed sanctions by the western nations. Tropical storm Isaac expected to strengthen to a Category 2 hurricane could trigger sharp upside spikes in Crude Oil Prices if US refineries and offshore oil production get disrupted. In addition Oil may also spike to well above $106.75, if the Fed hints on a timeframe of the soon expected US QE3 on Friday, at the conference from Jackson Hole Fed symposium, or the ECB announces any fresh substantial support / Stimulus package on Sep 6 or again the US Fed announcing clues to the QE3 at the Sept. 13 FOMC meeting, if not done earlier. Crude Oil Prices have been seen retreating to $95 from a resistance range around $98.20 to $100, but once this is overcome & sustained; oil prices may rise sharply to over $106.75 to $108.10 also. Historically, Gold Prices rise in tandem with rising Crude Oil Prices as a hedge against Inflation triggered by higher fuel costs. – Upside Trigger 

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