WE ARE READY TO EXECUTE GOLD AND SILVER TRADES ARE YOU? READ

1 Mar 2020

As we are publishing this report Gold is trading at $1586 however the white metal is hovering around 16.60.The major U.S stock indices have seen there the worst week since the last financial crisis of 2008. The S&P 500 has its worst day since August 18, 2011, and the three main indexes fell into correction territory. The Dow Jones dropped 1,191 points or 4.4% in its worst one-day point drop in history. The index has fallen more than 11%. All three major indices suffered there the worst week since the 2008 crisis. It seems Traders and investors are in a panic mode as they are realizing the impact of covid-19 on the global economy could be much more severe than they previously thought to be. we Still believe analysts are underestimating the devastating effect COVID 19 could bring to the world economy as a whole. The increasing number of cases of the coronavirus within china and in other countries is seriously alarming. Recently the number of infected people is growing especially in South Korea and Italy. Just as we are writing the report some of the shocking news is coming which we would like to mention.

Confirmed cases of COVID-19 continue to soar in South Korea home to the world’s biggest duty-free market. The total has reached 556 with five deaths, according to the country’s leading media agency Yon hap News. President of South Korea Moon Jae put the country on the highest possible Level 4 alert in its fight against COVID-19.one report suggests that the Airlines of South Korea could lose $29.3 billion. The Italian government on Saturday said it was considering “extraordinary measures” to fight the coronavirus following the deaths of two citizens. The outbreak has also caused Italian authorities to place several towns on lockdown amid a large increase in the number of cases, as well as the two deaths reported on Friday and Saturday. Oxford Economics estimated world economic output growth would fall to nearly zero in the first half of 2020 if the coronavirus outbreak became a global pandemic.

According to reports(Important): China ports are seeing container ship calls down 30% from last year. Oil shipments to China from the Middle East are down 88% from last year’s February deliveries. The International Energy Agency forecasts oil demand to fall by 435,000 barrels a day in the first quarter–the first contraction in 10 years. U.S. stock indexes are pointed toward sharply lower openings and at multi-month lows when the New York day session begins. Technology giants Apple Inc. and Microsoft have both issued sales warnings for the first quarter due to the impact of the virus

The most shocking thing which we saw today is witnessing the 10-year U.S Treasury note dropping to it’s all low of 1.17%. The continues drop in the U.S treasury bond yield is very alarming as it’s signaling the coronavirus devastating effect on the U.S. economy and on the global economy as a whole.one may think all this as a favorable conditions for the precious metal sector, however, the exact opposite happened today where we have witnessed severe downturn in the precious metal market. gold futures have broken below $1,600 on Friday and lost more than $100 from its recent peak. The white metal performance has been worst compared to gold hence Gold-silver ratio is currently trading near it’s an all-time high. The fear of slow global economic growth has also weighed on silver as both commercial and consumer demand for the metal will be reduced significantly if that event occurs. The speculation of interest rate cuts has also been unable to support the safe-haven
buying.

We believe there are a number of reasons behind the spectacular decline we have seen in the Gold and silver market. First of all, when panic sets in within the market, most market participants try to cash out doesn’t matter if it’s a safe haven asset or not. That what we have seen in the Gold market as most market participants sold their gold positions in order to be in cash, to meet There margin calls. Gold has also reached it’s 7 years high with a significant force as the number of long positions was at the record level. The last Commodity Futures Trading Commission report showed that managers had a net-bullish position of 238,546 futures contracts, which was a week-on-week increase of 22%. It seems the metal has been too overbought hence the correction was due however the volume accompanied with the correction was surprising for sure. We also need to keep in mind that China is a leading gold consumer and the coronavirus devastating impact on the world’s second-largest economy is going to impact the Chinese citizens’ purchases of gold and silver. The possibility of a reduction in the fed funds rate, Continuous falling of U.S bond yield, Rising tension in U.S.-China trade talks, Significant drop in U.S major stock indices, Fear of slow Global economic growth all are supporting the safe-haven buying at the moment. many investors may well want to buy gold again to take advantage of lower prices to build longer-term holdings. Our last trading position has reached its stop-loss hence At the moment we are not holding any position in our portfolio however once the market will open we will execute both Gold and silver trading positions within our portfolio