This analysis delivers a comprehensive overview of the gold and silver markets, highlighting both fundamental and technical drivers behind current trends. The report is designed to provide investors with the insights necessary to navigate these markets with confidence.
After a subdued European session, gold gained momentum in the latter half of Thursday, climbing toward $3,900. The weaker USD, combined with a cautious market mood amid the ongoing U.S. government shutdown, supported XAU/USD’s upward move. According to the Wall Street Journal, the U.S. has agreed to provide Ukraine with intelligence to assist in long-range missile strikes against Russian energy infrastructure—an initiative approved by Trump, with U.S. officials urging NATO allies to follow suit. These developments keep geopolitical risks elevated, limiting downside potential for gold and warranting caution among bearish traders. With key U.S. macroeconomic data, including the closely watched Nonfarm Payrolls (NFP) report, likely delayed by the shutdown, remarks from influential FOMC members are expected to guide USD sentiment and create short-term trading opportunities around XAU/USD.
From a technical standpoint, the daily Relative Strength Index (RSI) remains in extremely overbought territory, tempering bullish momentum for XAU/USD. However, the lack of significant selling pressure and a strong rebound from sub-$3,800 levels earlier this week reinforce the near-term positive outlook. Still, it may be prudent to wait for consolidation or a modest pullback before targeting further gains in the established uptrend. On the downside, support is seen near the $3,825–$3,820 area, with a sustained break below $3,800 opening the door to deeper declines toward $3,758–$3,757, $3,735, and ultimately the $3,700 mark. The short-term Stochastics Oscillator stands at 76, while the RSI remains elevated at 79.
Outlook
Gold is at a critical juncture, with clearly defined support and resistance levels signaling possible short-term market direction.
Silver (XAG/USD) retreated to around $46.66 during Asian trading on Friday, pulling back from record highs amid profit-taking. However, downside risks may remain limited as safe-haven demand persists, supported by global uncertainty and expectations that the Federal Reserve could move toward further policy easing in the months ahead. The ongoing U.S. government shutdown has stalled the release of key economic data, including the September Nonfarm Payrolls (NFP) report, leaving traders reliant on private-sector job projections instead. This lack of official labour market data could weigh on the U.S. Dollar (USD), thereby lending support to silver prices. On the technical side, the short-term Stochastics Oscillator stands at 79, while the Relative Strength Index (RSI) is elevated at 77.
● Stochastics Oscillator: A momentum indicator that compares a closing price to its recent trading range. Readings above 80 suggest overbought conditions, while readings below 20 indicate oversold levels.
● Relative Strength Index (RSI): Measures the speed and magnitude of price movements to assess overbought or oversold conditions. Values above 70 indicate overbought, while readings below 30 suggest oversold.
In today’s dynamic and rapidly shifting bullion markets, combining both technical and fundamental analysis is essential for sound investment decisions. This report aims to deliver a balanced perspective, helping investors navigate the complexities of gold and silver trading with greater confidence.