Today’s analysis offers a comprehensive examination of the gold and silver markets, highlighting the fundamental and technical factors that are influencing current trends. Our report is designed to empower investors with the knowledge necessary to navigate these markets successfully.
Gold prices surged past $2,900, reaching a new all-time high on Tuesday. Factors such as Trump’s new tariffs and ongoing geopolitical tensions are driving demand for this safe-haven asset. However, a slight strengthening of the USD has led to some profit-taking in the XAU/USD pair. The US dollar is trading stronger against higher-yielding currencies, but demand for gold and the Japanese Yen (JPY) remains robust compared to the Greenback.
Meanwhile, Wall Street is holding modest gains, although caution persists as investors await new developments from Trump. This week, all eyes are on US Federal Reserve Chairman Jerome Powell, who will testify before Congress on Tuesday and Wednesday, with market participants eager for insights into future monetary policy. Additionally, the January Consumer Price Index (CPI) will be released on Wednesday, with expectations of a core annual reading of 3.1%, down from December’s 3.2%.
From a technical standpoint, XAU/USD appears set to continue its rally. After pulling back slightly from its peak, it is currently trading around the $2,900 mark. Technical indicators remain bullish, showing upward momentum even in overbought territory without signs of exhaustion. The 20 Simple Moving Average (SMA) is trending upward, significantly above the bullish 100 and 200 SMAs, which are about $140 below the current price.
In the near term, while a corrective decline could occur, higher highs seem likely. According to the 4-hour chart, XAU/USD remains bullish. The Momentum indicator is firmly above the 100 line, and the Relative Strength Index (RSI) is around 73. Moving averages are trending upward, with a supportive bullish 20 SMA at $2,870.10. The Stochastic Oscillator is at 68, and the RSI is still at 73, indicating continued upward momentum.
Silver has encountered repeated challenges in maintaining momentum beyond the $32.30 resistance level, suggesting it may be wise to wait for a breakout above this short-term trading range before considering new bullish positions in the XAG/USD pair. A successful move above $32.65, the monthly swing high reached last Friday, could set the stage for a push toward the $33.00 round figure, a level not seen since early November.
On the downside, the $31.65-$31.60 range has become a key support zone. A decline below this area may present a buying opportunity, with further support likely near the 100-day SMA, currently positioned around $31.20-$31.15. If prices breach the $31.00 level decisively, it could trigger technical selling and lead to deeper losses.
In terms of technical indicators, the short-term Stochastic Oscillator is at 76, while the Relative Strength Index (RSI) stands at 59, suggesting that the market is leaning toward bullish but with room for correction.
In the dynamic and complex world of bullion markets, staying informed through both technical and fundamental analysis is essential for making informed investment decisions. Our report aims to deliver a balanced perspective, helping investors navigate the intricacies of gold and silver trading effectively.