Holidays for the global markets are over. Trading volumes will slowly rise in currency markets as well as commodity markets. Initially it will be a technical trade. There is no big US economic data release for the next week. There will be a fight between gold/silver bulls and bears this month. Quarter end position squaring and rebuilding will increase volatility. The direction of the Japanese yen against the US dollar will be crucial for gold and silver. The Yen has weakened but is still below key medium term resistance of 107.30 (usd/jpy). Currency market impact on global portfolio allocation will be much more than previous months of the year.
The best way to trade is ‘Mauka dekho aur chakkha maro’ (wait for the bad ball to hit the cricket six). Demand is there in Asia. Uncertainty over the pace of rise of gold and silver is preventing big purchases. Determination of the pace of the rise/fall of gold and silver will be the key to trading and not the actual price movement.
The G20 and other global forums are basically a photo-op for the people. There are cracks within the G20 or the NATO or the European Union. New leaders are less willing to be pawns for America. The tax verdict against Apple, Italy and other European Union members trying to defy sanctions against Russia, Closing of borders and accepting less Asian migrants than dictated by Merkel & Co are some the examples. The control power of the America is on the tortoise decline while the Chinese diplomats are everywhere. This situation is just the starting point as the world moves towards a feudalistic and barbaric society. We are living in a barbaric society. The Talibans, Islamic state (the creation of America/CIA) are barbarians. They surface anywhere and re start killing. These circumstances are forcing more and more people in Europe and America to start buying more physical gold.
This post was published at GoldSeek on 6 September 2016.