GOLD & SILVER PRICE OUTLOOK:Gold costs consolidate at US$ 1,860 after breaking a key assist at US$ 1,910Silver costs are test
GOLD & SILVER PRICE OUTLOOK:
- Gold costs consolidate at US$ 1,860 after breaking a key assist at US$ 1,910
- Silver costs are testing the 100-Day SMA at 22.80, with momentum biased to the draw back
- The US Greenback retraces barely from a two-month excessive, however could rise once more on election and Brexit dangers
Gold and silver costs consolidated for a 3rd consecutive week as merchants kicked off profit-taking following an enormous bull rally seen from March to August. Unwinding actions are additionally based mostly on a tepid inflation outlook as job development seems to have slowed lately and a second viral wave has probably emerged in Europe. A stronger US Greenback additionally weighed on treasured metallic costs. A transparent unfavourable correlation between gold and the US Greenback Index (DXY) was noticed up to now 52 weeks (chart under)
Beneficial by Margaret Yang, CFA
How can central banks influence markets?
Gold has retraced over 10% from its all-time excessive of US$ 2,075 noticed on the 7th August 2020, after rising greater than 40% from March low. Equally, silver has fallen over 27% from its latest peak of US$ 29.40, after rallying over 150% from March via to August.
The near-term outlook for gold largely is dependent upon the US Greenback, which is dealing with a string of market occasions this week. The closing spherical of Brexit talks on Monday in Brussels, the primary US presidential election debate on Tuesday and US non-farm payroll knowledge on Friday shall be essential for the US Greenback.
Gold Value vs. US Greenback Index – 52 weeks
Supply: Bloomberg, DailyFX
From a long-term perspective, nonetheless, gold costs appeared to have entered a interval of consolidation inside a mega bull pattern. The macro-environment (ultra-low rates of interest and QE) stays accommodative to treasured metallic costs, albeit a short-term pullback is underway.
Gold Value vs. Fed Stability Sheet
Supply: Bloomberg, DailyFX
Technically, gold costs are consolidating on the 100-day SMA (1,870) after breaking the 50-day line final week. The momentum seems biased in the direction of the draw back, with the subsequent key assist stage probably discovered at US$ 1,809 – a earlier resistance stage.
Gold Value – Every day Chart
IG Consumer Sentiment signifies that gold merchants are closely leaning in the direction of the lengthy aspect, with 82% of positions web lengthy, whereas 18% stay web quick. As gold costs fell, merchants favored quick (+4%) publicity fairly over lengthy (+3%) nonetheless, in comparison with per week in the past, merchants have trimmed some quick (-5%) bets whereas including some lengthy (+7%) positions.
Beneficial by Margaret Yang, CFA
Don’t give into despair, make a recreation plan
SILVER PRICE OUTLOOK:
Silver costs are additionally testing the 100-day SMA at US$ 22.80, which is a essential assist stage to look at. Close to-term momentum stays bearish-biased, with the subsequent assist stage probably discovered at US$ 21.80 – the 76.4% Fibonacci retracement.
Silver Value – Every day Chart
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Feedback part under or @margaretyjy on Twitter