Gold
The yellow metal has started the week with a slightly softer tone following the rally seen on Friday. Gold prices made an impressive recovery off last week’s lows as initial selling pressure quickly dried up. Price is now back above the 1763.88 level having trade lows of sub-1700 last week. The US Dollar is trading on the back foot following last week’s CPI miss which took the shine out of a bumper set of July labour indicators. With data still yet to highlight strong trajectory across the board, USD looks prone to further weakness in the near term as there is little to suggest the Fed is any closer to tightening.
This week the focus will be on US retail sales for July along with the July FOMC meeting minutes. With regards to the meeting minutes, traders will be keen to see just how active the discussion was around the potential for tapering this year. However, given that the meeting saw policymakers voting unanimously in favour of maintain policy at current levels, its likely there might not be too much market moving info in the minutes.
Silver
Silver prices have been a little more subdued than gold. For now, the market is sitting in a block of consolidation at the foot of the decline from the May highs. The pull back in USD has helped stem these declines for now. However, with rising Delta variant concerns clouding the outlook, there are risks of a further move lower for silver. As with gold, the key focus this week will be on the next round of US data. If retail sales underperform this will create space for the silver market to recover higher in the near term.
Technical Views
Gold
The rebound in gold prices has seen the market trading back up into the upper half of the bear channel from YTD highs. With price holding above the 1763.88 level for now, there is room for a further recovery if bulls can break the channel top, turning focus to 1826.71 next and 1871.04 thereafter.
Silver
The sell off in silver saw price trading as low as the 22.3205 mark, breaking below the bear channel, before quickly rebounding to close above. While below the 24.0073 mark, however, the risks appear skewed to more downside, in line with bearish MACD and RSI readings.
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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.