I expect some more additional stimulus measures today. Federal Reserve will copy its counter parts of bank of Japan and bank of England on additional stimulus measures. European central bank meeting tomorrow will have least impact on gold and silver. It can impact Euro versus the US dollar and Euro versus the Yen.
In the month of May more and more nations will allow factories and businesses to function. (a) If there is no significant increases in COVID cases (after the businesses open), then gold will move into a short term bearish phase. Crude oil, copper will rise. I better not comment on silver as it does not attract sustained investment demand. (b) If there is a significant increase in COVID cases (after the world factories and business open) and there is second phase of global lockdown, then gold will easily break past $2000 on or before 31st May. Under the worst case scenario I do not spot gold falling below $1530 in May.
Everyone is bullish on gold. Even I am bullish on gold. What can bring down gold?
1. Sharp reduction in gold investment demand.
2. COVID vaccine is available.
3. There are alternate safer short term investment.
4. Overall COVID cases (worldwide) see a significant decline every week.
5. Technical inability of spot gold to break $1780 by 31st May can also result a sharp selloff in gold. Remember that gold is now a case of helicopter money chasing gold.
6. US economic data releases beat street expectations. Particularly hiring.
7. Gold mines and gold processing units open and the so called shortage is eliminated.
COMEX SILVER JULY 2020 - current price $1544.00
1. Silver has not risen in April at all. The so called rise was just a technical pullback rally from highly oversold conditions. Silver will break free from $1540-$1630 trading range and form a new range anytime soon.
2. Silver needs to trade over $1360 till end June to rise to $2032.
3. Next wave of sell off will be there only if silver trades below $1360.
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