Kinesis Gold Analysis
The gold price is still recovering, after the decline in the first part of the week. US inflation in July grew slower than expected, which causes the hesitancy around the start of the tapering, making it seem less urgent. Meanwhile, the greenback is steady, with the dollar index traded at 93.00.
Technically speaking, the recovery of gold at the $1,750 level appears as a positive signal.
Gold price $/gram from Kinesis Exchange
The gold price continues to be driven by the news and rumours regarding the next decisions of the Federal Reserve. Every time that the vision of the upcoming tapering seems closer, the greenback strengthens, while gold and precious metals are suffering. Vice versa, any data below expectations potentially causes the Federal Reserve to postpone the tapering again and – consequently – the rebound of gold.
The current week started in red, as bullion was involved in a flash crash. The gold price reached a low of $1,677, before recovering to $1,740 – 1,750 within a couple of hours. The precious metal has so far managed to hold these levels and this can be seen as a positive signal. In other words, the short-term trend remains fragile, but buyers are active and ready to jump in, if the price declines further, with the clear objective of buying gold on dips.
Kinesis Silver Analysis
The scenario for the silver price remains fragile. Silver is currently traded just above $23 and so far not able to show any proper signal of recovery. Earlier this week, silver followed gold in the flash crash, falling to a low of $22.3, before rebounding to $24. Differently from gold, silver was not able to hold its value and started losing ground again.
The result is a weekly performance for silver of -4%, while gold is just in the fractional loss. Analysing the monthly performance, a weakness in silver is emerging, with the grey metal down by over 11%, while gold lost just 3%.
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.