ISA Bullion Gold Report – 5 July 2024

Market Overview

Today’s report offers a comprehensive analysis of the gold and silver markets, providing insights into the fundamental and technical factors driving current trends. Our goal is to equip investors with the necessary knowledge to navigate these markets effectively.

Fundamental Analysis

Gold prices are consolidating near two-week highs of $2,365 reached on Wednesday as the US Dollar continues to recover from recent declines, shrugging off a minor bounce in US Treasury bond yields. The market anticipates the return of US traders from the July 4 holiday and the crucial Nonfarm Payrolls data, which will shape market expectations about the Federal Reserve’s future policy decisions. This, in turn, will drive the near-term USD demand and provide a fresh directional impetus to the precious metal, which remains on track to register gains for the second consecutive week.

Gold:

• The gold price is set for further upside, with follow-through buying beyond the $2,366 area reaffirming a constructive outlook. This could allow XAU/USD to reclaim the $2,400 mark and possibly extend towards the all-time peak around the $2,450 zone touched in May. Conversely, any pullback to the $2,333 region could be seen as a buying opportunity, followed by support near the $2,314 area. A decisive break below this level could make the gold price vulnerable to further weakening below the $2,300 mark. The short-term Stochastics Oscillator is at 85 and the Relative Strength Index (RSI) is at 56.

Silver:

• Silver pulls back as the gold/silver ratio rebounded above the 77.50 level. Traders are taking some profits after the strong rally. From a technical perspective, silver needs to settle above the resistance at $30.90 – $31.20 to gain additional upside momentum. The short-term Stochastics Oscillator is at 79 and the Relative Strength Index (RSI) is at 54.