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Report on Precious Metals

Fundamental Strategies Technical Strategies

4 Strong Reasons Why Gold Should Rally Trend line as per chart has given breakout and moving
towards bullish trend. Suggest long positions at Rs.
30220/- with targets at Rs. 31500 in the short term and in
Gold has rallied 6 percent this year, and as investors
weigh mounting geopolitical tensions. The yellow metal extension Rs. 37000 in the long term.
climbed this week as the dollar and stocks slumped as
Comex Gold has given break out @ $1320 and may touch
slowing economic data and jitters over North Korea have
$1395 in the short term and $1472 in extension.
Wall Street hitting the panic button.
Silver
1. Political Unrest
Demand for silver is increasing in the home décor and
A number of ongoing issues are at play in creating more fashionable jewelry categories in the country which may
interest in risk-averse assets, such as gold. North Korean push the price of the metal by almost 15-20% in 2017. Last
missile tests and cyber-attacks around the globe are just year’s peak silver price of $21.07 serves to remind
two of the geopolitical concerns that continue to make precious metals watchers of the rally the white metal
news headlines. enjoyed. This year started with silver prices nearly 15
percent higher than at the beginning of 2016, leading
2. Economic Instability many investors to wonder if another rally is on the horizon
and if now is a good time to buy silver before prices climb
Recent economic reports from the U.S and China have again.
raised concerns that the economic recovery is slowing or
even showing signs of a full stall. This, tied with the historic Silver Price Factors of 2017
levels of global debt, the continued use of monetary policy,
and ongoing deficit spending, creates the potential for a The price of silver has started with an uptick for the year,
truly significant economic downturn and even crisis. and three big factors could significantly influence whether
or not they continue to rise: the state of the equities market
3. Technical Analysis at home; the economic and political climate of troubled
countries abroad; and the market response to the end of
silver price fixing by big banks.
Some technical traders note that recent trends indicate
that the prices for gold have consolidated, forecasting a
significant movement upward. With the combination of 1. U.S. Equities Market
buying signals for gold, continued historically low interest
rates despite Fed rate increases, and rapidly increasing Many market analysts are wondering how long the current
sell signals in the equities markets, the technical signs are equities market bull will run. The exuberance driving the
pointing to a strong performance for gold in the markets. market is increasingly out of sync with national and global
economic and financial realities. In fact, a number of
4. Weak Dollar analysts are predicting a significant correction in 2017,
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with some even seeing the makings of a major crash.
Such a reversal would, of course, redirect attention to safe
Many of the more respected analysts are watching
haven investments like silver.
the U.S. Dollar index closely and see it continuing on a
downward trend. Noting the traditional inverse relationship
between gold and the dollar index, we feel this is another 2. Global Economic Crisis
factor that will result in higher gold prices before the
yearend. The second major question that market participants are
asking is, “How many of the numerous economic and
Factors ahead for gold prices is the ECB meeting on 7th political threats to global security will come into play in
September, wherein they will possibly give hints over 2017"
winding up of the easy monetary policy programme and
the German elections on 24th September 2017. While there are no Brexit-type political events on the
schedule, there are a number of situations that can serve
as market tipping points in the coming months. First, there
are the ongoing problems in the EU, such as the Brexit
consequences, the potential Deutsche Bank crisis, the
threat of bank failures in Italy, and soaring Greek debt.
Secondly, there are the massive amounts of fiat currency-
backed debt in countries around the world, including the
U.S.

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06th September 2017
Report on Precious Metals

Of course, this intimidating list does not include the  All-time low interest rates, which are about to rise
possibility of disruptive actions by Russia or China or  Overvalued stock markets
tensions between US and North Korea and the totally  A fragile international monetary system that is
unforeseen events that create demand for safe haven debt-laden to the full.
investments.
Furthermore, it appears to be the first time that these ideal
3. Free Silver Market economic conditions for a rise in silver prices align in such
a timely manner; in particular, the bottom in interest rates,
Perhaps the biggest silver news of 2016 was the revelation the peak in stock markets, as well as the coming collapse
that big banks, such as Deutsche Bank AG, were involved of the monetary system. Potentially, all of these events can
in silver market manipulation. Further silver rigging was happen within a two- to three-year period.
disclosed in December and the scope of the scheme
expanded when documents Deutsche Bank provided as Previously, these significant points, like a stock market
part of the original lawsuit implicated a slew of influential peak, a bottom in interest rate and monetary collapse,
participants of the silver market: Bank of Nova Scotia, occurred in a much more scattered manner. For example,
HSBC Holdings PLc, BNP Paribas Fortis SA, UBS Group the big stock market crash of the Great Depression
AG. occurred in 1929, the monetary system collapse or change
occurred in 1933/1934 (dollar/gold revaluation), while the
Not only was nearly every big silver player in on the interest rates bottomed around 1941.
conspiracy but also the price fixing acts were particularly
egregious. Traders called to talk silver prices before the It was after the last of these events - the bottom in interest
markets opened; exchanged customer order-flow rates (or the peak in government bonds) in 1941 - that
information with associates on the other end of deals; silver prices really took off and kept on rising for many
triggered customer stop-loss orders; and posted silver years.
purchase requests with no intention of following through on
them. Technical Strategies

Now that it appears all of the perpetrators have been Trend line as per chart has given breakout and moving
caught and free market forces may once again drive silver towards bullish trend. Suggest long positions at Rs.
trading, we hope to see prices for all precious metals rise. 41400/- with targets at Rs. 44500 in the short term and in
With no one artificially deflating silver prices and inflating extension Rs. 54000 in the long term.
the dollar, the latter’s value will fall, thus sending the Comex Gold has given break out @ $1320 and may touch
former skyward. We may then see a return to a more $1395 in the short term and $1472 in extension.
reasonable silver-to-gold ratio.

A restoration of the free silver market is not the only


reason prices will climb. The whole price fixing fiasco has
left investors disillusioned with paper assets and more
confident than ever in gold and silver.

Silver Price Forecast for 2017 Two months pair call :

With all of those factors in play, a number of analysts see Buy Gold Dec @ Rs. 30350 and Short USDINR Dec @
a positive silver price forecast for 2017. Even the 65.07 tgt profit Rs. 105000 sl loss Rs. 50000
conservative estimates are positive, with firms like HSBC
focusing on the supply deficit and seeing an average price Buy Silver Dec @ Rs. 41440 and short USDINR Dec @
of $18.75. Other estimates see an increase of at least 15 65.07 tgt profit Rs. 30000 sl loss Rs. 15000
to 20 percent in silver spot prices—even if none of the
major events discussed above occur. Positional pair call :

Significantly, there is a growing sentiment that increases in Buy Gold Dec @ Rs. 30350 and Short USDINR Dec @
silver prices will extend well beyond the coming year. It 65.07 tgt profit Rs. 6,20,000 sl loss Rs. 50000
may be that today’s silver prices will be seen as bargains
as early as Q2 2017.
Buy Silver Dec @ Rs. 41440 and short USDINR Dec @
65.07 tgt profit Rs. 350000 sl loss Rs. 25000
The long-term view of silver is extremely bullish, given that
it is one of the most undervalued metals today. It is evident
Ratio :1 lot Gold against 35 lots USDINR and 1 lot Silver
that ideal economic conditions are present for silver prices
against 35 lots USDINR
to rise for many years to come:

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06th September 2017

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