Gold Tumbles 3%+; Safe Haven Not so Safe

With world markets crashing and burning over the coronavirus crisis, the one asset that’s supposed to be protecting investors is letting them down.

Gold tumbled more than 3% on Friday, joining the carnage in oil and on Wall Street, where the S&P 500 headed for its worst weekly slump since the financial crisis of 2008. Gold futures for April delivery on New York’s COMEX were down $57.50, or 3.5%, at $1,585 per ounce, falling off the key $1,600 berth. The last time benchmark gold futures lost more in a day was in February 2018, when it slumped 4.6%. For the current week, the contract lost 3.7%. But for the month it managed to stay flat and in the positive.

Oil sink to lowest in over a year, biggest weekly drop since 2016

Oil prices slumped for a sixth day in a row on Friday to their lowest in more than a year, causing futures to drop by the most in a week since 2016, as the spread of coronavirus stoked fears that a slowing global economy would hit energy demand.

The coronavirus spread further, with cases reported for the first time in six countries across three continents, battering markets and leading the World Health Organization (WHO) to raise its impact risk alert to “very high.” most active Brent future for May LCOc2 delivery fell $2.06, or 4.0%, to settle at $49.67 a barrel, its lowest since July 2017.

China’s Commodity Mountain That Risks Crushing Prices

China’s accumulating a vast stack of commodities that’s threatening markets already hammered by the coronavirus. As the government compels the country to get back to work, oil refineries are churning out diesel and gasoline while smelters and other industrial plants continue to process raw materials into finished products like steel and copper. But they’re not being used quickly enough. Consumption has shrunk as people stay at home and travel less, and as logistical constraints stop output from reaching end-users. So the commodities are piling up outside plants, in warehouses and storage tanks. Inventories of steel products this week surged to a record, while copper supplies at warehouses tracked by the Shanghai Futures Exchange expanded to the highest ever for this time of year.

TECHNICAL VIEW

MCX Gold last week showed straight bullish movement and pulls upward towards the resistance level of 40500 and closed around it. For upcoming week if price trades above 41000 levels then it can give upside movement up to next psychological resistance level of 41500. On lower side, if price slide towards lower side than 39500 will act as vital support level below this momentum can find next support level at 39000.

STRATEGY

Better strategy in MCX GOLD is to buy above 40500 for the target of 41000 with stop loss of 39800.

TECHNICAL VIEW

MCX Silver last week showed sideways to bullish movement after took a support of 45678. For upcoming trading session we will continue to suggesting bearish trend, if price sustains below 45500 levels and after that 44500 to 44000 will act as a next important support level. On higher side it has immediate resistance at 48000 and if price maintain above this level then it will take towards the resistance level of 49500.

STRATEGY

Better strategy in MCX SILVER is to buy above 47500 for the target of 49000, with stop loss of 45500.

TECHNICAL VIEW

MCX Crude oil last week showed bearish movement in whole week and found near to its support zone i.e. around 3850 levels. For upcoming period if  bearishness will active towards support level of 3800 then after that 3650 will be next immediate support and if price takes bullish movement from current levels towards upside side then it can test resistance level of 4100 and after that 4300 will act as a next resistance level.

STRATEGY

Better strategy in MCX CRUDE is to sell below 3800 for the target of 3650, with stop loss of 4000.

TECHNICAL VIEW

MCX Copper last week showed bearish movement, drag down towards the support level of 437.40. For upcoming session, if price maintains above 447 levels then it may give more upside movement towards next resistance level of 457. On lower side it has support level at 435 and if sustain below 434 level then it will move down towards the next major support level of 425.

STRATEGY

Better strategy in MCX COPPER is to buy above 442 for the target of 447, with stop loss of 435.

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