Gold
A muted start to the week for the yellow-metal as higher equities prices and a firm US Dollar offset any residual safe-haven demand for gold. Price has remained range bound over recent sessions following the sharp recovery off the 1700 handle. However, with prices still capped by the bear-channel top, the recovery has lost momentum for now.
Looking ahead this week, there is plenty of US data to keep an eye on. Preliminary quarterly GDP on Thursday will be the first reading to note. The market is looking for an increase on the last reading (6.6% vs 6.5%), which should keep USD supported in the near term if confirmed, weighing on gold. We then have core PCE (Fed’s primary inflation gauge) on Friday along with Fed chairman Powell due to speak at Jackson Hole on Friday also.
The market will be paying close attention to Powell’s comments, looking for any clues as to the potential for policy normalisation in the coming months. If there is judged top be any hawkish shift here, this will likely see USD sent firmly higher in the near term, pulling gold prices lower. Alternatively, a cautious message from Powell will likely once again take the shine off USD.
Silver
Silver prices have started the week on a positive note though, broadly speaking, remain weighted to the downside. The rally in USD as well as ongoing fears over the demand outlook, linked to rising variant cases, mean that silver’s prospects remain dim here. US data over the week will be the key driver to watch, along with broader movements in risk flows and COVID updates.
Technical Views
Gold
Gold prices remain hemmed in by the upper line of the bearish channel which has framed the correction from YTD highs. Following the rebound off recent lows, indicators have turned positive here, suggesting room for a further rally if bulls can break the channel top. 1826.71 is the next upside level to note, while 1763.88 is first support.
Silver
The recent retest of the 24.0073 level in silver has seen the market roll over once again. With RSI and MACD both still bearish, the market looks on course to continue within the bearish channel down to the 22.3205 level next though bullish divergence is noted within the indicators, advising caution around current levels.
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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.