Today’s analysis offers a comprehensive overview of the gold and silver markets, highlighting the key fundamental and technical factors influencing current trends. This report is designed to provide investors with valuable insights to help them navigate these markets with confidence.
Gold gained strong bullish momentum, surging to fresh all-time highs amid escalating geopolitical tensions. Reports suggest the United States was notified in advance of the recent attack, according to Israeli sources. Meanwhile, the US Dollar resumed its broader downtrend following a brief recovery during Monday’s Asian session, currently trading at its lowest level in seven weeks against a basket of six major currencies.
Growing expectations of aggressive interest rate cuts by the Federal Reserve continue to weigh heavily on the Greenback. This sentiment is fueled by deteriorating labor market conditions and mounting stagflation risks. According to the CME Group’s FedWatch Tool, markets are currently pricing in an 89.4% probability of a 25 basis point rate cut at the Fed’s September meeting, with a 10.6% chance of a larger 50 basis point cut. Speculation is also mounting that the Fed could implement more than two cuts before the end of the year.
Gold extended its rally on Monday, reaching a new all-time high near $3,675.00 before experiencing a sharp pullback due to profit-taking. Despite the correction, technical indicators remain firmly in bullish territory, although still within overbought levels—suggesting the potential for a short-term consolidation or minor pullback before the next leg higher.
Price action remains above all key moving averages, with the 20-day moving average continuing to trend upward. On the 4-hour chart, XAU/USD found support early in the day at the bullish 20-period MA, while the 100 and 200 SMAs are slowly turning higher, though still lagging below the shorter-term average.
Momentum indicators have resumed their upward trajectory after easing from extreme overbought conditions. The short-term Stochastics Oscillator stands at 92, and the Relative Strength Index (RSI) is currently at 81—both reinforcing the near-term bullish bias, though caution is warranted given the extended levels.
Silver continues to track gold’s upward momentum, attempting to establish a firm base above the $41.00 level. From a technical standpoint, the recent pullback appears to be a result of profit-taking after the strong rally seen over the past two weeks, combined with mildly overbought conditions on the daily chart.
Should selling pressure persist, the $40.00 level will be a key area to watch. This zone is expected to act as a pivotal support, and a decisive break below it could open the door for a deeper correction in XAG/USD.
Momentum indicators remain elevated but are showing signs of cooling. The short-term Stochastics Oscillator is currently at 86, while the Relative Strength Index (RSI) stands at 66—both still above neutral levels, indicating the uptrend remains intact, albeit with caution warranted in the near term.
Stochastic Oscillator: A momentum indicator that compares a security’s closing price to its price range over a specified period. Readings above 80 signal overbought conditions, while readings below 20 suggest oversold levels.
Relative Strength Index (RSI): Measures the speed and magnitude of recent price movements to assess potential overbought or oversold conditions. An RSI above 70 indicates overbought territory; below 30 signals oversold.
In today’s dynamic and often unpredictable bullion markets, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. This report aims to deliver a balanced perspective, equipping investors with the insights needed to confidently navigate the complexities of gold and silver trading.