Daily Gold and Silver Market Analysis- 21 January 2025

Fundamental Analysis

Gold prices continue to rebound, retesting monthly highs of $2,725 early Tuesday. Gold buyers are re-entering the market in response to US President Donald Trump’s tariff threats, which are fueling risk-off sentiment across financial markets. Trump has indicated that he is ready to impose tariffs on China if Beijing does not approve the TikTok deal. This has driven investors to seek safety in gold, supporting prices near the monthly highs of $2,725. However, further gains for gold buyers may be limited as the US Dollar (USD) strengthens on safe-haven demand, putting a cap on the dollar-denominated precious metal. Additionally, while expectations of two interest rate cuts from the US Federal Reserve (Fed) this year, following mild December inflation data, provide support for gold, this outlook could shift if inflation concerns dampen investor sentiment.

Gold

The short-term technical outlook for gold remains positive. The recent breakout from a symmetrical triangle pattern is still intact, and the yellow metal is trading well above all major daily moving averages, reinforcing the bullish sentiment. The 14-day Relative Strength Index (RSI) is trending upward above the midline, further supporting the bullish case. Currently, the Stochastic Oscillator is at 89, and the RSI stands at 63.

Silver

Silver prices have declined, causing the gold/silver ratio to rise above the 89.00 level. This upward movement in the ratio presents a challenge for silver. If silver maintains its position above the 50-day moving average at $30.42, it may target the next resistance level between $31.00 and $31.75. Currently, the short-term Stochastic Oscillator is at 78, while the Relative Strength Index (RSI) is at 55.