Kinesis Gold Analysis
The gold price recovered to the $1,800 mark last week. Bullion rebounded despite the beginning of tapering from both the Federal Reserve and ECB, which seem to be closer.
This week, gold is confirming its recovery even after the monthly Consumer Price Index (CPI), released on Tuesday by the American Bureau of Labor Statistics, jumped to 5.4%, pulling up the greenback, while the Dollar index rallied to 92.6. Therefore, the rebound of gold is even more significant and it is showing, once again, increasing investor appetite for the precious metal.
The market saw a recent decline from $1,900 to $1,750 as a buying opportunity rather than an inversion for bullion and the long term trend still appears positive. The huge amount of liquidity injected into the monetary system in the last few years is likely to remain a supportive element for bullion and for the whole precious metal complex for a long time.
Looking at the technical picture, we observed an interesting rebound from $1,750 to above $1,800 in the last few days. The slight decline seen in the early trading on Monday was not deep enough to change the positive set-up of the last few days. Despite this, we are seeing lateralization of prices, which are now caged in a trading range. A clear break above $1,820 would be a positive signal while a decline below $1,788 would denote some weakness.
Analysing the price of gold in dollars per gram, we have seen a recovery above $58.
Kinesis Silver Analysis
Silver remains traded above $26 per ounce. In the last few weeks, the precious metal has created a solid support zone in the area of $25.5 - 26, which is currently supporting prices. The silver price is moving in a lateral trading range, in a scenario of low volatility. The commodity rush seen in the final part of 2020 and earlier in 2021 has temporarily slowed down, with prices currently placed in a lateral phase. The strength of the US dollar did not help silver as well to continue its rebound.
From a technical point of view, a break up of the resistance zone of $26.5-26.6 could open spaces for further recoveries, while falls below $25.5 could show some selling pressure.
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 250-pages 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.