Gold
The gold market has started the week on a neutral footing with price currently holding around the week’s opening price. For now, the market is sitting slightly lower against the highs printed last week around the 1871.04 level last week. The current rally in the US Dollar is creating an obstacle to higher prices in gold as traders continue to increase their expectations that the Fed will step up its tightening program. A bumper set of inflation and retail sales data for October has raised hawkish risks ahead of the next FOMC in December. At the very least, traders now suspect that, should the current economic trajectory continue, the Fed will raise rates earlier than expected, around the middle of next year.
This week there is plenty of key US data for gold traders to keep an eye on. Preliminary quarterly GDP and core PCE data will be the key releases to watch on Tuesday and Wednesday, followed by the FOMC minutes later on Wednesday. In light of recent data strength, the risks are of further upside surprises this week which would continue to lead the Dollar higher, weighing on gold.
Silver
Silver prices have started on a stronger footing this week. Despite the current rally in the Dollar, silver prices have drawn some support from the resilience in equities prices. With asset prices remaining near recent highs (particularly US industrial stocks), silver is likely to remain supported. Any firm break higher in the Dollar this week, however, will likely see silver price turn higher.
Technical Views
Gold
The breakout above the bear channel in gold has seen price trading as high as the 1871.04 level. For now, the market is paused here, with sellers turning price lower from the level. However, with both RSI and MACD still bullish, while price remains above the 1826.71 level, the focus is on further upside in the near term.
Silver
The breakout above the bear channel in silver has seen the market grinding higher within a well defined bull channel. Price is currently paused ahead of the 25.5384 level which marks the recent highs. However, while the market remains within the bull channel, the focus is on a continued push higher towards the 26.5711 level next.
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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.