Commodity Trade Mantra | Aug 29, 2012 03:06AM ET
Gold prices have shot up last week on an increased likelihood of further money printing by the US Fed. Declines in silver and gold prices will relatively be well supported due to the Market’s fixation on a fresh round of monetary easing expected from the US, Europe and China. Silver, Crude Oil and Gold Prices Expected To Swing Wildly In The Coming 20 Days
September would prove to be a critical month for gold markets. Silver and gold prices weakened exactly as alerted yesterday after the initial upside of euphoria. Given yesterday - gold trading along with silver and other base metals can now be expected to remain relatively subdued until Tuesday night and is expected to again pick up momentum from Wednesday onward.
Silver and gold prices along with crude oil and base metals may all see volatile see-saw swings on events scheduled for the next 20 days. The upside and downside swing triggers are mentioned below.
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 Iran dispute and 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 its 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 September 6 or again the US Fed announcing clues to the QE3 at the September 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 and 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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