It’s been a strong start to the week for metals markets with gold prices breaking out to fresh highs on soaring safe haven demand. Risk sentiment has taken another leg lower this week as traders digest the developments over the weekend with regard to the main geo-political driver currently; the crisis in Ukraine.The intensification of violence over the weekend, as well as the latest insistence from Putin that Russia will continue its “special military operation”, has further rattled markets.
With the violence continuing, and showing little sign of abating, gold prices look set to remain supported on safe-haven flows near term. Silver prices are tracking these moves with prices now back up to their highest level since August 2021. Looking ahead this week, US CPI on Thursday will be the key release data-wise. With the market firmly fixed on a March rate hike, traders will be looking for Thursday’s data to confirm this view. We also have the March ECB meeting due on Thursday with traders keen to hear how Lagarde and co judge the risks around the crisis in Ukraine. The ECB had taken an unexpected hawkish shift last time around, however, given the developments since then, markets will be expecting the ECB to strike a more considered tone this time around.
Technical Views
Gold
The rally in gold over today’s European session has seen the market breaking out above the initial highs posted in reaction to news of the war breaking on the 24th Feb. With price now trading above the broken bull channel and with both MACD and RSI firmly bullish, the focus is on a continued push higher near term with the 2014.32 level the next resistance to note. To the downside, the key support area to note is the 1919.92 level, with the bull channel top coming in just ahead.
Silver
Therally in silver has seen price breaking firmly above the 25.5384 level as the breakoutabove the bear channel continues to develop. With both MACD and RSI firmlybullish here, the focus is on a continuation higher while the market holdsabove the 25.5384 level. To the topside, 26.5711 and 27.4502 are the next keylevels 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.