Today’s analysis offers a comprehensive overview of the gold and silver markets, providing insights into the fundamental and technical factors shaping current trends. Our report is designed to equip investors with the knowledge necessary for effective navigation of these markets.
Fundamental Analysis
Gold prices are continuing their consolidative movement within the weekly trading range. The Fed’s hawkish pause presents a headwind for this non-yielding asset. Meanwhile, declining US bond yields have put pressure on USD bulls, providing some support for gold. The Federal Reserve maintained the benchmark policy rate in the 4.25%-4.50% target range but adjusted the language in its policy statement to reflect a slightly more hawkish stance. Notably, the Fed removed the earlier wording indicating that inflation “has made progress” towards the 2% target, instead stating that the pace of price increases “remains elevated.” Additionally, during his post-policy press conference, Fed Chairman Jerome Powell emphasized the need for further progress on inflation and indicated that the Fed does not feel rushed to make adjustments.
Gold Outlook
The technical setup on the daily chart continues to favor gold, suggesting a “buy-the-dips” approach. The 14-day Relative Strength Index (RSI) remains comfortably above the midpoint, which keeps gold buyers optimistic. Supporting the bullish outlook, the 50-day moving average (MA) is positioned above the 100-day MA, confirming a Bull Cross. For a fresh uptrend to initiate, gold prices need to close above the record high of $2,790. Key upside targets are set at $2,815 and the psychological level of $2,833. On the downside, immediate support is identified at $2,743, with sellers potentially targeting the round number of $2,700. Currently, the Stochastic Oscillator is at 81, and the Relative Strength Index is at 63.