ISA Bullion Gold Report – 4 July 2024

Market Insights

Today’s report provides a detailed analysis of the gold and silver markets, highlighting the fundamental and technical factors influencing current trends. Our objective is to equip investors with the insights needed to navigate these markets effectively.

Fundamental Analysis

Gold price is looking to extend the previous upsurge early Thursday, sitting at the highest level in over a week near $2,360. Sustained US Dollar weakness alongside sluggish US Treasury bond yields underpin Gold prices amid the July 4 US holiday-thinned market conditions.

Gold:

• The overnight breakout, along with the fact that oscillators on the daily chart have again started gaining positive traction, favor bullish traders. Some follow-through buying and sustained strength beyond the $2,366 area will reaffirm the constructive outlook, setting the stage for a move toward reclaiming the $2,400 mark. The Gold price might then extend the positive momentum and aim to challenge the all-time peak, around the $2,450 zone touched in May. On the flip side, any meaningful pullback now seems to attract fresh buyers near the 50-day MA support, around the $2,333 region. The next relevant support is pegged near the $2,314 which, if broken, could make the Gold price vulnerable to weaken further below the $2,300 mark. The short-term Stochastics Oscillator is at 72 and the Relative Strength Index (RSI) is at 55.

Silver:

• Silver rallied above $30.50 as the gold/silver ratio pulled back towards the 77 level. Silver prices have been rallying since the start of a new week and managed to secure a third consecutive quarterly gain. The market’s performance was influenced by conflicting factors: U.S. inflation data aligning with expectations bolstered prospects for potential Federal Reserve rate cuts, while higher Treasury yields and a firmer dollar exerted downward pressure. Investors are betting on two interest rate cuts this year, despite the Federal Reserve projecting only one, reducing the opportunity cost of holding non-yielding assets like silver. The short-term Stochastics Oscillator is at 68 and the Relative Strength Index (RSI) is at 51.