Gold & Silver Bouncing Within Recent Ranges
Metals traders may well now be thinking what is it going to take to see gold and silver break out of these ranges? Despite all the various economic and geopolitical events of note over the last month two months, both metals are still well within their recent ranges and showing little sign, as yet, of making a move elsewhere.
Both gold and silver have started the week with fresh demand, driven by the current softness we are seeing in USD. Fed chairman Powell was heard focusing on recession risks at his semi-annual testimony at the Senate last week. With markets now starting to question the likelihood of the Fed pushing ahead with its current plan trajectory of rate hikes over the year, there might well be room for a broader move higher in metals. However, with equities prices seeing strong demand currently, these gains are likely somewhat limited for now, therein creating the current dilemma.
This week, the G7 meetings should provide the biggest input for metals prices. Traders will be focusing on any and all comments around global recession risks and, should we see USD soften further, metals should have room to continue higher over the week.
Along with the G7 meetings taking place all week, we also have USD core PCE and ISM manufacturing readings over the back end of the week. Additionally, a slew of PMI readings (Eurozone, UK, US) will give further insight into the performance of the global economy and will do doubt feature in any discussions around recession risks this week.
Technical Views
Gold
For now, gold prices continue to trade within the bear channel which has framed the sell-off from YTD highs. Recently, prices have settled into a range between the 1791.63 and 1871.04 levels. While the channel holds, focus is on a downside break targeting 1722.37 next. If we see a topside channel break, 1919.92 will be the next target for bulls.
Silver
Silver prices are bouncing higher this week following the latest test of the 20.5023 support, which marks the lower limit of the range between that support and 22.3205 resistance. While price continues to hold below the broken bullish trend line, the focus is on a downside break, targeting 19.6543. To the topside, bulls need to see a break of the range highs and a move back above the broken bullish trend line in order to mark a shift in outlook, putting 24.0073 on the radar as the next bull objective.
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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.