Today’s analysis offers a comprehensive overview of the gold and silver markets, highlighting the fundamental and technical factors influencing current trends. Our report is designed to empower investors with the knowledge necessary for effective navigation of these markets.
Fundamental Analysis
Gold prices attracted buyers for the fourth consecutive day on Friday, fueled by fresh fund inflows. However, the Federal Reserve’s hawkish stance, high U.S. bond yields, and a strong dollar may limit gains. Traders are likely waiting for the key U.S. Non-Farm Payroll (NFP) report due later today.
Increased demand for safe-haven assets is overshadowing the persistent strength of the U.S. dollar and Treasury yields. Concerns about inflation have risen due to potential changes in immigration and trade policies under President-elect Donald Trump, enhancing gold’s appeal as both an inflation hedge and a traditional safe-haven asset. Meanwhile, expectations of fewer interest rate cuts by the Federal Reserve this year, along with economic uncertainties in China, continue to support the dollar as it hovers near weekly highs against major currencies. U.S. benchmark 10-year Treasury yields have reached eight-month highs above 4.68%, which somewhat limits upside potential for non-yielding gold. Markets remain risk-averse and cautious ahead of the NFP report, refraining from making significant bets on gold.
Gold
The markets have surpassed Wednesday’s overnight swing high around the $2,670 level, previously viewed as a key hurdle, now serving as a potential trigger for bullish traders. The 14-day Relative Strength Index (RSI) is comfortably above the midline, currently near 56.00, supporting the ongoing upward trend in gold prices. With oscillators on the daily chart entering positive territory, gold could rise towards intermediate resistance near the $2,758 zone, targeting the $2,700 mark. Conversely, any declines are likely to find support around the $2,641 area (50-day EMA), with further selling pressure below the $2,603 (100-day EMA) and $2,600 levels. The Stochastic Oscillator is at 88, while the Relative Strength Index stands at 56.