Today’s analysis offers a comprehensive overview of the gold and silver markets, delving into both the fundamental and technical factors influencing current trends. Our report is designed to provide investors with valuable insights to help them navigate these markets with confidence.
Gold prices have faced some selling pressure for the second consecutive day, as the U.S. Dollar (USD) experiences a modest uptick. Hawkish comments from Federal Reserve Chair Jerome Powell overnight have revived demand for the USD. Concerns about a potential trade war are expected to limit any significant pullback in the safe-haven XAU/USD pair. Spot Gold reached a new record high of $2,942.76 early Tuesday, before giving up those gains. The metal then dropped to $2,880 early in the U.S. session, but quickly regained the $2,900 level as the session progressed. Powell is scheduled to repeat his testimony on Wednesday, though before a different commission. In addition, the U.S. will release the January Consumer Price Index (CPI), which is forecasted to rise by 2.9% year-over-year, matching December’s reading. The core annual CPI increase is expected to be 3.1%, slightly lower than the previous 3.2%.
From a technical standpoint, Gold remains bullish, though overbought conditions suggest that a corrective pullback is still possible. On the daily chart, technical indicators are retreating slightly but remain at extreme levels. Gold continues to trade well above all of its moving averages, with the 20 Simple Moving Average (SMA) moving higher, though currently positioned at around $2,787.34—too far below the current price to have immediate relevance. Gold has recently corrected its overbought conditions in the short term and may resume its upward movement from here. On the 4-hour chart, buyers have added long positions during intraday dips toward the bullish 20 SMA, which now provides dynamic support around $2,870. Meanwhile, the 100 and 200 SMAs maintain strong upward slopes well below the shorter SMA. Technical indicators have corrected from overbought territory but are flat above their midlines, signaling continued buying interest on price retracements. The Stochastic Oscillator is at 67, and the Relative Strength Index (RSI) stands at 72.
Silver prices (XAG/USD) are recovering from recent losses, trading around $31.90 per troy ounce during Wednesday’s Asian session. Safe-haven demand for the precious metal has increased as risk aversion grows due to new U.S. tariffs and rising geopolitical tensions in the Middle East. However, the non-yielding nature of silver may pose a challenge, as Fed Chair Jerome Powell indicated there is no immediate need to cut interest rates. In the short term, the Stochastic Oscillator is at 71, and the Relative Strength Index (RSI) is at 58, suggesting moderate bullish momentum with room for further price movement.
In the dynamic and constantly changing bullion markets, it is essential to stay informed through both technical and fundamental analysis to make sound investment decisions. Our report aims to offer a balanced perspective, helping investors navigate the complexities of gold and silver trading with confidence.