Gold
The yellow metal has commenced the new week on a slightly softer footing, seeing some selling across the European open, on the back of solid gains on Friday. The rally in gold came despite a stronger-than-expected US labour market data for October. The headline NFP reading was seen rising to 531k from 312k prior and 455k expected. Additionally, the unemployment rate was seen dropping back down to 4.6% from 4.8% prior and below the 4.7% reading forecast. In terms of the Dollar reaction, (greenback reversed initial gains post-data) the only real fly in the ointment was the average hourly earnings release which fell to 0.4% from 0.6% prior.
Looking ahead this week, the main focus will be on US PPI and CPI. Following the Fed’s tapering announcement last week, it would likely take a significant uptick in data to affect any change in rate path projections over the near term while any disappointment would likely see the USD correction deepen, paving the way for higher prices in gold. Also worth noting a slew of Fed member commentary due over the week which might prove market moving.
Silver
Silver prices are having a somewhat former start to the week with the metal continuing to climb here as the recovery off the 22.9600 lows continues to develop. The ongoing rally in equities prices, along with the weakness in the US Dollar is helping create demand here. If the USD correction deepens, this should keep silver on a firm upward trajectory over the week. However, any US data beats would likely reverse this dynamic in the short term.
Technical Views
GOLD
The recent rally in gold has seen the market breaking out above the bear channel from year-to-date highs. With both MACD and RSI supportive, while price holds above the 1763.88 level, the focus is on a continued push higher and an eventual break of the 1826.71 level next, targeting 1871.04 thereafter.
SILVER
The current rally in silver is threatening to carve out a deeper reversal higher following the breakout above the bear channel. With both RSI and MACD bullish here, there is room for silver prices to push higher while the market holds above the 24.0073 level, putting the focus on a test of the 25.5384 level next. To the downside, 22.3205 remains the key 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.