Daily Gold and Silver Market Analysis- 3 January 2025

Today’s analysis delves into the gold and silver markets, shedding light on the fundamental and technical drivers shaping current trends. This comprehensive report is designed to empower investors with actionable insights to navigate these dynamic markets effectively.

Fundamental Analysis

Gold prices started the New Year on a strong note, rallying alongside the US Dollar (USD) as investors sought safe-haven assets amidst escalating geopolitical tensions. Concerns surrounding the policy direction of the incoming US President and the Federal Reserve (Fed) added to market caution. Additionally, robust US jobs data revealed that Initial Jobless Claims hit an eight-month low, dropping by 9,000 to 211,000, outperforming the 222,000 forecast. However, the figures may have been influenced by year-end holiday distortions.

Looking ahead, the focus shifts to the US ISM Manufacturing PMI and a scheduled speech by Richmond Fed President Tom Barkin later today, which are expected to provide fresh trading cues for gold.

Gold 

Gold prices are consolidating gains after a two-day rally, holding above $2,650 in early Friday trading. The US Dollar’s rally has stalled amid softer Treasury bond yields and a cautious market sentiment.

Technical Indicators:

• The 14-day Relative Strength Index (RSI) has reclaimed the 50 level, indicating potential upside momentum.
• Thursday’s rally cleared key daily moving averages, with the price closing on a strong footing.

Key Levels:

• Upside Targets:
  If bullish momentum persists, the next resistance is the $2,700 round level, followed by the December 12 high of $2,727.
• Downside Support:
  Immediate support lies at the 50-day Exponential Moving Average (EMA) at $2,636. A break below this level could see prices testing the weekly low of $2,592.

Oscillator Levels:

• Stochastic Oscillator: 50
• RSI: 54

These readings suggest room for further price movement in either direction, depending on market catalysts.

Silver Price Update

Silver edges higher, nearing the critical $30.00 mark, as the gold-to-silver ratio dips below the psychologically significant 90.00 threshold. A sustained weekly close above $30.00 could pave the way for further gains, with the next target zone positioned between $30.33 and $30.61.

Technical Indicators:

• Stochastics Oscillator: 30, indicating potential for continued movement.
• Relative Strength Index (RSI): 42, suggesting a neutral-to-slightly bullish momentum.