08 November
Gold and silver market
The price of spot Gold has been on a downward trajectory, mainly due to the rebound in the US Dollar (USD). As of the Asian session on Wednesday, Gold is trading lower at approximately $1,970 per troy ounce.
One of the challenges facing the price of Gold is the fact that traders have already incorporated a reduced risk premium from the Israel-Hamas conflict. The lack of an escalation in the conflict has led to a diminished safe-haven demand for Gold.
In recent news, the International Monetary Fund (IMF) has revised its GDP growth projections for China. They now anticipate a growth rate of 5.4% in 2023, up from the initial forecast of 5.0%, and 4.6% in 2024, surpassing the previous estimate of 4.2%. This positive shift in China’s economic landscape could potentially impact Gold prices.
Furthermore, the recent decline in US Treasury yields can be attributed to the optimistic mood on Wall Street, which has dampened the demand for safe-haven assets like Gold. Market participants are speculating on the possibility of the US Federal Reserve (Fed) postponing interest rate hikes in future meetings. This sentiment is fueled by both disappointing Non-Farm Payrolls data and the dovish stance adopted by the Fed in its November meeting.
Investors are likely to closely watch for further insights into the potential trajectory of interest rates from Fed Chairman Jerome Powell’s speech at a conference in Washington, DC, on Wednesday, hosted by the Division of Research and Statistics.
From a technical perspective, it’s noteworthy that for the first time since October 12, the MACD has shown a negative divergence on daily charts. The RSI is hovering near its support level of 55 and would need to break and sustain below this level for bearish sentiment to take hold.
In the previous session, the market found support exactly at the 21-day EMA, situated at 1958. It may trade in a range-bound manner until either 1958 or 1984 is breached. On the downside, if we maintain support below 1956, the next level of support comes in around 1938.
Stay tuned for the latest developments in the Gold market as these factors continue to influence its price movements.
– Nitin Kedia
