This report provides a comprehensive overview of the gold and silver markets, analyzing the fundamental and technical factors shaping current trends. Our goal is to equip investors with actionable insights to navigate these markets with confidence.
Gold is trading in a subdued tone, holding above $2,600 per troy ounce. Market activity remains limited as investors prepare for the upcoming winter holidays, with most major markets set to close for Christmas celebrations. A decline in Wall Street’s performance has bolstered the strength of the US Dollar, while an increase in government bond yields adds further support to the Greenback. The 10-year Treasury yield stands at 4.56%, up approximately 4 basis points.
Meanwhile, macroeconomic releases scheduled for Tuesday provide additional context. Durable Goods Orders dropped by 1.1% in November, underperforming the anticipated 0.4% decline. Additionally, CB Consumer Confidence fell significantly in December to 104.7, down from November’s 112.8, and missing expectations of 112.9. President Joe Biden’s executive order closing the federal government on December 24 has further limited market momentum.
The short-term technical outlook for gold remains bearish, with the downside bias intact as the 14-day Relative Strength Index (RSI) stays below the 50 level. Reclaiming the 50-day Exponential Moving Average at $2,639 on a daily closing basis is critical for reversing the current downtrend. A close above this level could pave the way for gains toward $2,666. Beyond that, resistance is noted at $2,692–$2,700, which could test bearish resilience.
If the recovery falters, sellers may revisit the 100-day EMA, now acting as resistance-turned-support, at $2,592. A break below this level could expose the $2,566–$2,533 range. The Stochastic Oscillator is currently at 24, while the RSI reads 45.
Silver remains steady as the gold/silver ratio retracts towards the 88 level. The ratio’s inability to maintain above 90 offers a bullish perspective for silver. A move above $30.00 could drive prices toward resistance at $30.36–$31.69. Conversely, sustained declines might lead silver to test the 200-day EMA at $29.05, with subsequent support levels identified at $28.70 and $28.33. The short-term Stochastics Oscillator is at 24, and the RSI stands at 42.
In the ever-evolving bullion market, understanding both technical and fundamental aspects is essential for making informed investment decisions. This report aims to provide a balanced perspective, helping investors effectively navigate the complexities of gold and silver trading.