Gold
Gold prices have started the week in demand, with the safe haven asset well bid at the European open on Monday. Despite the gains, however, the metal remains heavily lower on the back of the sell off seen last week in response to the hawkish June FOMC meeting. While the Fed held monetary policy unchanged, the dot plot forecasts saw upward revisions with 13 policy makers now projecting a rate hike in 2023, up from 7 in March. The Fed also revised higher its growth and inflation forecast which, accordingly, traders now see as increasing the chances of the Fed tapering this year.
The unwinding of USD short positions has seen the greenback shooting higher, pulling gold lower. Looking ahead this week, we are likely to see a continuation of this this theme. While these is little in the way of key US data, PMI readings mid-week could see some further USD buying on a positive set of releases. The market will also be looking to Fed chairman Powell’s testimony at the Senate on Tuesday. Traders will be keen to glean any further details regarding the hawkish shift at the latest FOMC meeting, especially given that there were hardly any changes to the bank’s policy statement.
Silver
Silver prices have largely tracked the moves in gold with the market collapsing last week in response to the shift in USD positioning. As with gold, we are seeing buying so far today. However, in light of the heavy selling last week, the market looks poised for further downside should the move in USD continue this week.
Technical Views
GOLD
The breakdown in gold prices has seen the market blowing through the bottom of the rising channel as well as the 1826.71 level. For now, the move has found support into a test of the 1763.88 level. With MACD and RSI both bearish, however, there is room for a further push lower with 17000 the next key downside level to watch.
SILVER
The breakdown in silver has seen the market moving below the rising channel and below both the 27.4502 and 26.5711 levels. For now, selling has stalled with buying kicking in ahead of the 25.1018 level. With MACD and RSI both bearish, however, the focus is on further downside for now.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.