Gold
Gold prices are continuing their recent rally this week with the safe haven asset still attracting a strong bid. The continued weakness in the US Dollar is the main driver behind the move. Last week, USD bulls were left disappointed when, on the back of a stronger-than-expected April inflation report, the retail sales data for that month missed forecasts. US retail sales for April printed 0% and -0.8% on the headline figure and core reading, respectively, against 1% and 0.5% expected. With the greenback taking a nosedive in response to the release, gold prices have seen further demand as the metal continues to recoup its 2021 losses, making its way back up to the 61.8% retracement of the drop from 2021 highs.
With little in the way of tier one data this week, gold prices are likely to continues higher in the near term with the Dollar unlikely to find a reason to reverse higher from here. In terms of the broader risk backdrop, the rally in gold continues despite robust risk appetite. With the US re-opening well underway and the UK seeing lockdown measures eased again as of today, equities are trading with an optimistic tone. For now, the outlook for gold remains in favour of further upside with the Dollar likely to continue to hold near lows and drift lower over the week.
Silver
Much the same as gold, silver prices have started the week on a positive note with strong buying over the European session so far on Monday. The return to weakness in the US Dollar has been a key catalyst for this strength and while the Dollar remains under pressure, silver looks geared towards further upside in the near term. Looking ahead this week, the main data to watch will be the next round of US, UK and EZ PMI data due later in the week, Silver traders will be paying particular attention to the manufacturing reading. Further strength in the factory sector should see silver prices continue to trade higher.
Technical Views
GOLD
The breakout above the bearish channel from last year’s highs has seen gold trading up to the 618% retracement of the sell off from 2021 highs. With the MACD indicator bullish here and the RSI supporting, the focus is on a continued push higher towards the 78.6% retracement next, around 1900, and the 1919.92 resistance thereafter.
SILVER
The breakout above the falling wedge pattern in silver is finding fresh momentum now with price once again attempting to breakout above the 27.4502 level. With the MACD indicator having turned bullish, and the RSI supportive, the focus is on further upside with the 29.9383 level the next big upside marker for bulls.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.