On Thursday morning Gold opened low and currently trading around $1693.60. Metals are incompetent to sustain at higher levels. Moreover, investors are expecting a hike in interest rates by the Central bank to curb the mounting inflation.
Inflation rose to 1.3 percent due to which we are expecting a hike in interest rates by 0.75 BPS. Therefore, policymakers would take all the stringent steps to control the inflationary periods.
Today we have specific events like Philly FED Manufacturing Index, Unemployment Claims, ECB Press Conference, and Natural Gas storage.
Soaring inflation bit by bit is leading European Central Bank to show concerns about the interest rates. However, since 2011 this would be the first time when the bank is planning to raise interest rates to control inflation.
On the contrary, the Bank of Japan says that they will not be making any changes in interest rates even if there is an increase in the CPI Index.
Despite Japan, all the other central banks are taking measures to curb the runaway inflation thereby tightening their respective monetary policies.
Let’s have a technical view now…!!
Metals are incompetent to sustain at higher levels. Furthermore, Natural Gas is the only commodity that is trading with a green candle.
Today, Gold damp down and is trading at its 52-week low. Traders are advised to focus on the monetary policy of both Japan and the European Union. Along with this, Philly FED Manufacturing Index and Unemployment Claims come with the utmost importance.
Predictors are expecting a growth in numbers in the Philly Fed Manufacturing index. Not only this, they are anticipating a fall in Unemployment Claims. Consequently, seems a good indication of a growing economy.
Due to the above-mentioned reason, we may witness a downside panic in bullions.
All eyes are on EU Press Conference which is going to be held today at 5:15 PM. If the Central Bank raises the interest rates, then we may see an upside rally in Euro prices. Sideways, this may provide good support to the prices of gold and silver.
Gold has a major support level of $1675. If Gold breaches the level of $1675 then we may witness a huge downside panic in the next couple of days.
An upcoming FOMC meet is on the 27th of July. If the FED raises 0.50 BPS, then the market has already discounted that rate. Moving further, if there would be a hike in interest rate by 0.75 BPS then a huge downside panic market may experience in the next couple of days.
If we converse about Base Metals then yesterday we were sitting on buying side but during the evening trading session, base metal switches their side and settled with a red candle.
Thursday morning, base metals opened negative and persistently trading in a red zone.
If a cooper breaches the recent low of $3.13 then we may witness more sharp downside panic in the days ahead.
A lot will be seen in the next 5 trading sessions...!!
Gold and base metal expiry, today’s key data and Fed’s decision on interest rates on Wednesday night… all together enough for huge volatility
The ECB may change interest rates for the first time since 2011, the European Central Bank. It is indicated that a change of up to 0.50% in interest rate is possible. Japan has not made any major changes in interest rates.
If the ECB makes a big change in the interest rates, then the euro and silver prices will get support and will see a bounce. The decision on the interest rate of the ECB is at 5:45 pm and the press conference at 6:15 pm.
There is room for improvement in manufacturing and unemployment figures from the US. Due to which a bounce in the dollar and pressure in bullion can be seen. The data will be presented today at 6 pm.
The move will be seen on both sides in the market. In the next 5 trading sessions, do not sell at the lower levels and will not buy on the upside. The market will remain direction less and will create trouble.
Buy with a small stop loss near support and sell with a small stop loss near resistance. Don’t wait for big moves.
If any big move is found then we will definitely update in Commodity Samachar. Read commodity news daily carefully. Read, understand and trade with confidence. Ultimately the stop loss is the real god of this market.
For more updates, stay tuned with us!