ISA Bullion Gold Report – 6 August 2024

Market Insights

This report provides a detailed examination of the gold and silver markets, highlighting the fundamental and technical factors influencing current trends. Our aim is to equip investors with the insights needed to navigate these markets effectively.

Fundamental Analysis

As geopolitical tensions in the Middle East remain precarious, traders are closely monitoring developments, refraining from taking new positions in gold. The downside risk for gold is limited, however, as the market anticipates a 90% probability that the US Federal Reserve will cut interest rates by 50 basis points in September. Monday’s sell-off in gold, despite broad risk aversion, can be attributed to investors locking in profits on long positions to offset losses in other areas. Global stock markets experienced turmoil due to escalating Middle East tensions and fears of a US economic slowdown following the weak US jobs report on Friday.

Gold:

• Gold prices closed above the key 21-day Simple Moving Average (SMA) at $2,411 on Monday. The 14-day Relative Strength Index (RSI) remains above 50, currently around 52.50, indicating that bullish momentum is still present. Buyers need to establish acceptance above the static resistance at $2,425 to maintain upward momentum toward the previous highs of $2,450. Further gains could target the lifetime high of $2,484, achieved on July 17. On the downside, if sellers push prices below the 21-day SMA, support could be tested near $2,370, followed by the 50-day SMA at $2,342. The short-term Stochastics Oscillator is at 61, and the Relative Strength Index is at 49.

Silver:

• Silver rebounded from a low of $26.55, testing key resistance at $27.50. A breach above this level could negate the bearish outlook and lead to further gains toward $28.55. The expected trading range for today is between $26.50 support and $27.60 resistance. The short-term Stochastics Oscillator is at 31, and the Relative Strength Index (RSI) is at 38.