This report offers a comprehensive overview of the gold and silver markets, highlighting the key fundamental and technical drivers shaping current price action. By providing clear insights into market dynamics, our aim is to empower investors with the information needed to make informed and strategic decisions.
After dipping to early-session lows near $3,330 per troy ounce, gold has regained some composure, trading back toward the $3,350 level on Tuesday. This recovery is largely driven by weakness in the US Dollar and mixed movements across the US Treasury yield curve.
The release of the July US Consumer Price Index (CPI) provided a mixed inflation outlook. Headline CPI rose by 2.7% year-over-year, slightly below the market consensus of 2.8%. However, core CPI came in stronger than expected at 3.1%, above both the prior 2.9% and the 3.0% forecast. On a monthly basis, headline CPI rose 0.2%, while the core reading matched expectations at 0.3%.
Geopolitical developments also continue to influence investor sentiment. Market optimism surrounding US-Russia diplomatic talks on Ukraine, as well as a possible extension of the US-China trade deal, has played a role in shaping risk appetite. Notably, former President Trump is expected to meet with Russian President Vladimir Putin later this week to negotiate an end to the conflict. In the lead-up, Trump has imposed tariffs on Russian oil buyers in an effort to pressure Moscow.
Gold is currently trading around the $3,350 level, with sellers continuing to defend the psychological resistance zone. After reaching a two-week high at $3,409 last Friday, the metal has struggled to sustain bullish momentum.
Price action continues to respect a broader ascending triangle formation, although this structure showed signs of weakening last week when gold briefly broke below the rising trendline. That pullback, however, attracted strong dip-buying interest, allowing bulls to re-establish footing and preserve the broader bullish outlook.
Momentum indicators are mixed. The Relative Strength Index (RSI) on the daily chart stands at 50, reflecting neutral-to-mildly bullish sentiment. The Stochastics Oscillator is at 60, indicating potential for further upside if momentum builds.
Key Resistance: A daily close above $3,400–$3,410 would be a strong bullish signal, potentially opening the way to $3,455, with $3,500 (all-time highs) back in focus.
Immediate Support: Near-term support lies at $3,350, followed by the round number $3,300. A break below this level would undermine the current bullish structure and shift the bias in favor of the bears.
Silver rebounded toward the $38.00 level, supported by a decline in the gold/silver ratio below 88.00 and a pullback in gold prices. A sustained move above $38.00 could open the path to the next resistance zone at $38.80 – $40.00. On the downside, a drop below $37.40 would likely lead to a retest of support in the $37.00 – $36.74 range. Momentum indicators show a mildly bullish bias, with the Stochastics Oscillator at 70 and the Relative Strength Index (RSI) at 58.
Stochastics Oscillator: A momentum indicator that compares a security’s closing price to its price range over a specific period. Readings above 80 typically indicate overbought conditions, while readings below 20 suggest oversold levels.
Relative Strength Index (RSI): An indicator that measures the speed and magnitude of recent price changes to assess market conditions. A value above 70 signals overbought conditions, while a reading below 30 indicates oversold territory.
Navigating the dynamic and often volatile bullion markets requires a solid understanding of both technical and fundamental factors. Staying informed on these fronts is essential for making sound investment decisions. This report aims to offer a balanced perspective, equipping investors with the insights needed to effectively manage the complexities of trading in gold and silver.