18 August
Gold and silver market
The recent decline in Spot Gold prices to a five-month low on Thursday can be attributed to various factors, including the upward movement of Treasury yields, a strengthening dollar, and a more hawkish stance on interest rates expressed by Federal Reserve officials. The minutes from the Fed’s July 25-26 meeting revealed that most policymakers are still focused on combating inflation, although a few participants did acknowledge potential risks to the economy if interest rates were raised excessively.
As the anticipation of prolonged higher U.S. interest rates persists, yields on the benchmark 10-year U.S. Treasury have reached their peak since October. This has led to a decreased appeal of non-yielding bullion for investors.
Recent data indicates a decline in new unemployment benefit claims, pointing towards a labor market that remains somewhat tight.
From a technical perspective, the hourly chart shows a positive shift in the RSI slope along with the MACD, while the daily charts still favor a bearish sentiment. Key levels to monitor include 1880, and if this support holds, there’s potential for the levels of 1920 and 1935 to be reached in the upcoming week.
Notably, the 20-period EMA on the 4-hour chart has acted as a significant resistance point since August 7th. Currently positioned at 1898, a successful close above this level today, coupled with trading above 1913 next week, could indicate a change in favor of the Bulls against the Bears.
This juncture provides an opportunity to unwind unfix positions and potentially embark on a bullish trajectory for the next 2 to 3 months.
