Today’s analysis offers a comprehensive overview of the gold and silver markets, delving into the key fundamental and technical factors shaping current trends. Our report is designed to equip investors with the insights necessary to navigate these markets with confidence.
Gold prices continue to decline following a Fed rate cut that disappointed market expectations, coupled with signals of gradual easing in the future. The Federal Open Market Committee (FOMC) recently reduced rates by 25 basis points, hinting that further cuts are expected in 2025. Additionally, the Summary of Economic Projections indicated that 50 basis points of cuts could occur toward the end of this year, with the median estimate suggesting the fed funds rate will reach 3.60%.
During his press conference, Fed Chair Jerome Powell acknowledged that labor demand has “softened” and inflation remains “somewhat elevated.” He further stated that the balance of risks had shifted, positioning policy to respond in a timely manner. Powell also noted that the labor market is not as solid as it once was. When questioned about the possibility of a 50-basis-point cut, he clarified that there was “no widespread support for a 50 bps cut today,” emphasising that the Fed is not in a rush to ease policy.
The daily Relative Strength Index (RSI) for gold is hovering near the overbought territory, which could prompt some profit-taking in the short term. The recent bounce from the $3,645 area — previously a resistance level and now a support level after breaking through a bullish flag pattern — suggests that caution is needed for bearish traders. It may be prudent to wait for confirmation of further selling below this level before looking for additional losses, possibly targeting the $3,610–$3,580 range.
On the other hand, the $3,675–$3,700 zone could serve as an immediate resistance level, with the $3,730 region acting as the next significant hurdle. A sustained break above $3,730 would likely trigger further bullish momentum, allowing gold prices to extend the recent breakout and continue the uptrend observed over the past month.
Short-term indicators such as the Stochastic Oscillator at 78 and RSI at 70 suggest that gold is nearing overbought conditions, potentially signaling a pullback or consolidation before any further upside.
Silver Analysis
Silver (XAG/USD) has drifted higher, approaching the $42.00 mark, following the Fed’s rate cut. As anticipated, the Federal Reserve lowered its benchmark interest rate in its September meeting — the first cut since December — and signaled that additional reductions are likely later this year. In his remarks, Fed Chair Jerome Powell highlighted growing signs of weakness in the labor market as the main driver behind the decision to reduce rates, after holding them steady since December due to concerns over tariff-driven inflation.
Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like silver, making it more attractive. This environment is supportive for the white metal, which stands to benefit from both reduced borrowing costs and its safe-haven appeal in uncertain economic conditions.
From a technical perspective, the short-term Stochastic Oscillator stands at 68, and the Relative Strength Index (RSI) is at 63, indicating that silver is approaching neutral territory. While there is room for further upside, silver may face some resistance or consolidation in the short term before potentially making another move higher.
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 landscape of the bullion markets, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. This report aims to deliver a well-rounded perspective, helping investors better understand and navigate the complexities of gold and silver trading with confidence and clarity.