Insignia
Consultants
New Delhi
Sunday,
October 27, 2019
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2020 DIWALI MCX GOLD
AND MCX SILVER FORECAST in the shortest possible words
A bit on the Indian rupee
US dollar inflows in India should be the highest among nations. The
reason is simple, Modi government wants to sell all its cash cows or blue chip,
highly profitable public sector units to overseas investors. US dollar inflows
will not be an issue. Indian economy is still down. Hiring is down.
Bonuses/wage growth do not even cover inflation. I believe that Indian economic
growth should bottom out next year. Rupee can weaken till March 2020.
Thereafter gain, against the US dollar. I am also bearish on the US dollar next
year due to US elections.
Those who are banking on a weaker rupee for higher gold and silver price
can rejoice till March 2020. On or from April 2020, a gold prices will not rise
due to a weaker rupee.
Positive/bullish/favorable factors to watch till next Diwali
1.
Trade war theme: A resolution can temporarily bring
down gold (from the highs). Continuation of trade war can easily result in gold
price rising to $2250-$2500 zone by next Diwali.
2.
Interest rate cut and monetary expansion: Almost
every central bank is injecting liquidity along with interest rate cut. Gold
will peak out only when people believe/perceive that interest rates have
bottomed out.
3.
Central bank buying: I see continued increase of
gold reserves by almost all central banks till next Diwali.
4.
US presidential elections: 2020 US presidential
elections is going to be the worst national elections for mankind. Trump has
started using all kinds of means to get re-elected. This will only increase as
the months pass by. Uncertainty, flip-flop and mudsling and the unfolding of US
political drama should be bullish for gold and silver.
5.
Investment demand: Gold and silver investment
demand will continue to rise for weeks and months ahead as long as recession
theme is the headline.
Negative/bearish factors to watch till next Diwali
1.
An end to trade war theme: Difficult to comment on
the same. Negative political effects can end the trade war. Trade war will end
only when leaders of the affected nation feel that they can loose power. Bad
economic may or may not end the trade war theme.
2.
I have written (in earlier reports) that global
stock market should see the mother of all bulls run before the US presidential
elections. A weak stock markets never wins an election in any part of the
world. Trump has to ensure by hook or by crook or by state manipulation that US
stock market move into a short term bullish phase. If this happens then gold
prices will see a very short term bearish phase. Gold needs to trade over $1700
before any stock market bullish trend to just correction.
Overall trend is bullish for gold and silver till
next Diwali. I prefer investing in silver over gold till next Diwali. 70:30
ratio in favor of silver. Silver investing is about patience. If you are an
impatient investor then invest fully in gold and zero in silver.
What long term technical say
MCX GOLD FUTURE –
current contract Rs.38269
·
Gold can rise to 42596 and 50672 as long as it
trades over 35559.
·
Key support till next Diwali: 33943-35559
·
Key resistance till next Diwali: 42596-45233
·
Immediate support: 37843
·
Immediate resistance: 40311
·
There is a big long term technical congestion
between big support zone between 36227-36580 zone. As long as gold trades over
36227-36580 zone (till next Diwali), it will rise to 42596 and 50672.
·
Bearish case: (a) Gold does not break 42496
and/or (b) Gold trades below 36495.
MCX SILVER FUTURE
– current contract Rs.46306
·
Silver can rise to 54252 and 61997 as long as
it trades over 39868.
·
If silver trades over 54252 for a week, then
it will rise to 71694.
·
Key support till next Diwali: 39868.
·
Key resistance till next Diwali: 52300.
·
Immediate support: 44678.
·
Immediate resistance: 50009.
·
Bearish case: (a) Silver does not break 54252
and/or (b) Silver trades below 42827 for a week.
Disclaimer: Any
opinions as to the commentary, market information, and future direction of
prices of specific 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. All analyses used herein are subjective
opinions of the author and should not be considered as specific investment
advice. Investors/Traders must consider all relevant risk factors including
their own personal financial situation before trading. Websitewww.insigniaconsultants.in. 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
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