Metals Still Stuck In The Mud
If you’ve been trading metals recently and waiting for a break, in either direction, it’s likely been a very frustrating time. On the back of almost two months of range trading, gold and silver prices remain stuck this week. Looking at gold prices firstly, despite all of last week’s events ( .75% hike from the Fed, surprise .5% hike from the SNB) gold prices failed to break out of their recent 1791.63 – 1871.04 range.
With the Dollar having fallen on the back of last week’s FOMC, we saw better upside action in gold over the back end of the week. If USD continues to weaken this week, gold bulls might be in with a chance of an upside break. This view will be strengthened if equities remain under pressure also. Mounting recessionary fears might work in gold’s favour this week. However, the issue now is that with CHF soaring higher on the back of last week’s surprise SNB hike, CHF has become more attractive again as a safe-haven currency, and might divert demand away from gold.
Silver prices have been equally muted. Looking ahead this week, the key focus points will be Powell;s testimony at congress and a slew of PMI data sets due later in the week. If Powell strikes a more concerned tone over the health of the economy and the risks of a hard landing, this will likely weigh on USD near term, allowing metals room to recover.
Technical Views
Gold
Gold prices continue to trade within the bear channel which has framed the decline from YTD highs. Recent, price has found support at the 1791.63 level. However, price has been unable to break above resistance at 1871.04. Looking at recent price action, we might be seeing price carving out a higher low against that support level, suggesting room for a break higher near-term. Above the channel top, 1919.92 is the next target for bulls.
Silver
Silver prices are once again sitting back above the 2021 lows of 21.4525 following the rebound higher off the 20.5023 level. However, the recovery has so far failed on the retest of the broken bull trend line. While below here, risks of a further fall are the main focus. Bulls need to see a clean break back above the broken bull trend line to put 24.0073 in view. On the other hand, failure here will open the way for a fresh downside move targeting the current 2022 lows and 19.5643 below.
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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.