Kinesis Gold Analysis
Gold remains traded in the lateral trading range of $1,790 – 1,820. After the break-up seen last week, bullion was not able to hold above $1,820. The slowdown of the positive momentum is mostly due to the strength of the greenback, generated by the recent rally of the US Inflation, which jumped above 5%, increasing chances of an early tapering from the Federal Reserve.
Despite the US dollar's recovery, bullion volatility has been relatively low in the last few days, with the gold price moving in a tiny range and holding the support zone of $1,800. A clear surpass of $1,820 could open space for new recoveries, while a decline below $1,790 could denote some weakness.
Investors’ eyes are now focused on the ECB meeting and the minutes of the summit, as markets are trying to understand if Christine Lagarde and her team will confirm the dovish position shown in the last few months. This seems highly likely as inflation in Europe does not seem to be a problem and remains well below US levels. A dovish ECB could be a supportive element for the gold price.
Analyzing gold price per gram, we can see it is holding above the key level of $58.
Kinesis Silver Analysis
In the current scenario, silver remains weaker than gold, as the metal's price did not solidly rebound in the first part of this week. From a technical point of view, the decline of silver below the threshold of $26 seen in the final part of last week weakened the short-term picture and so far silver has not shown any clear rebound signal, falling to $25/oz.
Silver would offer a positive signal only with the recovery of the resistance levels placed at $26 and 26,5. As mentioned in previous commentaries, the scenario for long-term investors appears much different as silver could be an interesting hedge in case of further inflation’s rally.
Carlo Alberto De Casa is Market Analyst for Kinesis.
He also writes as a technical analyst for the Italian newspaper La Stampa.
Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018.
This report is not an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance.