Today’s analysis delivers 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 the insights they need to make informed decisions in these dynamic markets.
Gold continues to retreat from its all-time high above the $3,700 level reached the previous day, sliding to a new daily low during early European trading on Wednesday. This decline comes as the US Dollar stages a modest rebound from its lowest point since early July, driven by some repositioning ahead of the crucial FOMC decision.
Market participants have been increasingly factoring in the likelihood of more aggressive policy easing by the Federal Reserve in response to signs of a weakening labor market. While this has limited the upside for the USD, it has also provided a degree of support for non-yielding assets like gold.
Additionally, heightened geopolitical tensions and a generally cautious market sentiment continue to underpin demand for safe-haven assets, helping to cushion gold from steeper losses. Traders are likely to remain on the sidelines ahead of more clarity on the Fed’s rate-cut trajectory, which is expected to be a key driver for both the USD and gold in the near term.
From a technical standpoint, the overbought condition on the daily Relative Strength Index (RSI) has triggered some profit-taking in gold. A sustained move below the $3,633 horizontal support zone could open the door for a further decline toward the $3,610–$3,600 region. This area is expected to act as a strong support base for the XAU/USD pair. A break below this zone could lead to deeper losses, with intermediate support around $3,562–$3,560, and potentially extending toward the psychological $3,500 mark.
On the upside, bulls may look for a confirmed breakout and acceptance above the $3,700 level to resume the prevailing uptrend seen over the past month.
Stochastic Oscillator: 68
Relative Strength Index (RSI): 67
These indicators suggest that momentum remains moderately strong but is approaching overbought territory, indicating the potential for continued consolidation or a near-term pullback.
Silver prices are under pressure as a stronger U.S. inflation outlook dampens expectations for aggressive Federal Reserve rate cuts. While Fed Chair Jerome Powell acknowledged growing signs of labor market weakness, his comments also reflected ongoing concerns about inflation—particularly in light of potential tariff-driven price increases. This dual narrative has contributed to market uncertainty and a more cautious outlook on monetary policy easing.
Meanwhile, both the Bank of England and the Bank of Japan are anticipated to maintain their current policy rates this week, which may add to the subdued sentiment in broader markets, limiting upside momentum for silver in the near term.
From a technical perspective, silver’s recent pullback appears to be a healthy consolidation within a broader uptrend.
Stochastic Oscillator: 65
Relative Strength Index (RSI): 58
These readings suggest that silver is neither overbought nor oversold, indicating room for further movement in either direction. A sustained drop below key support levels could accelerate short-term downside, while any signs of renewed USD weakness or safe-haven flows may provide fresh support for XAG/USD.
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 the dynamic and constantly shifting bullion markets, a well-rounded understanding of both fundamental and technical factors is essential for sound investment decisions. This report aims to deliver a balanced perspective, equipping investors with the insights needed to navigate the complexities of gold and silver trading with greater confidence and clarity.