Gold
Following the decline seen across June, gold price are attempting to recover so far this month with price making its way up off the sub 1763.88 lows to around the 1804 mark as of writing. The driver behind the downside move in gold had been the repricing of US rates in response to hawkish Fed expectations. Despite a general lift in expectations that the Fed will look to taper this year, the upward move in USD has run out of steam for now, allowing gold prices some room to recover here.
On the data front, USD bulls have been stifled by spotty releases. The June labour reports for example showed that while the headline NFP figure was better than expected, both the unemployment rate and average hourly earnings underwhelmed expectations. With the Fed reiterating its view that there is still a long way to go and it is not concerned about the current lift in inflation, USD has lost some ground here.
This week the focus will be on US CPI due on Tuesday. A strong upside reading will likely rejuvenate USD bulls causing downside in gold. However, should the data disappoint, we are likely to see USD coming under heavy selling pressure near term, creating space for gold to recover higher.
Silver
Silver prices have been more muted this month with the market recoiling from earlier highs posted above the 26.5711 level. Despite the improvement in demand expectations for silver, as a result of the broader global rebound, silver has come under pressure of late with prices remaining mostly rangebound. Looking ahead this week, key US data releases have the potential to create Dollar volatility which could force a break in silver.
Technical Views
Gold
The rally in gold prices off the 1763.88 level lows has seen price trading back up towards the 1826.71 level. With MACD and RSI both bullish here, the focus in on a break higher. To the downside, any move below the 1763.88 level will target the 1700 level next.
Silver
Silver prices remain range bound within the 25.5384 – 26.5711 levels for now. With MACD and RSI both around neutral levels there is room for a break either way. To the topside, the key resistance to note is 27.4502 while to the downside, 25.1018 is the next support to note.
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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.