Gold
The gold market starts the week in better demand following the losses seen across the back end of last week. The US Dollar has seen choppy price action on the back of the September FOMC last Wednesday. While the Fed once again noted that tapering would likely be necessary soon, Powell stopped short of giving a clear signal on timing, frustrating USD bulls once again. With no clear signal as to whether tapering will start this year, equities markets have traded firmly higher, taking some of the shine off gold.
In the near term, the outlook for the gold market will hinge largely on the reaction to incoming US data. Any upside USD data surprises will likely be met with a move higher in USD, weighing on gold, as traders bring forward tapering expectations. On the other hand, any negative data surprises will likely send gold higher as USD retreats on falling tapering expectations.
With that in mind, traders will this week be focusing on two testimonies from Fed chairman Powell, looking for further clues on tapering, as well as US data in the back end of the week ( GDP and ISM manufacturing).
Silver
Silver prices have started the week in a similar fashion to gold with the metal seeing decent bids across the European open. Price remains fairly stagnant at the foot of recent declines, however, and looks vulnerable to a further move lower unless we see some decisive upside action. The resurgence in the US Dollar is offsetting the better price seen in equities markets recently. Additionally, supply chain issues between the UK and Europe as well as fears over rising global Delta cases are weighing on the demand outlook for silver here.
Technical Views
Gold
The drift lower in gold prices from the failure at the 1826.71 level has seen the market trading back down to retest the broken bear channel top around the 1763.88 level. This is a key region for the market and bulls will need to get back above here to keep the focus on any further upside. Below here, the 1700 handle is the next support to note.
Silver
The sell off in silver prices from the latest test of the channel top has seen the market trading back down to challenge the 22.3205 level support. With both MACD and RSI bearish here, there are risks of further losses and a continuation of the bear channel unless bulls can get back above the 24.0073 level in the near term, effectively creating a double bottom at the current lows.
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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.