Kinesis Macroeconomic Analysis
The U.S. stock index Standard & Poor’s 500 just reached the 12th new high in August, confirming that the markets have digested Jerome Powell's speech at the Jackson Hole Symposium.
The Federal Reserve Chairman was not extremely dovish, but his “wait and see” model – without formally announcing the beginning of tapering – was enough to trigger new rallies on stocks and gold, while the U.S. Dollar declined. Yes, the tapering will probably start in the final months of 2021, but this was more or less expected. Moreover, Powell highlighted that the first interest rate hike is not planned for a relatively long time and is not related to tapering. All this lifted up stocks and particularly the technology sector (who usually pay fewer dividends), with Apple surpassing 2.5 trillion of the market cap.
Kinesis Gold Analysis
Analyzing the scenario for gold, it seems we are back again in the lateral trading range between $1,790 and $1,820. The slow dance in this tiny range of prices was the leit motiv during the second half of July.
Now the scenario could be different. Overall, the technical picture for gold appears stronger, after the rally of the last two weeks. So far the resistance placed at $1,820 has managed to stop further recoveries. Gold is trying to break up this level, helped by the temporary weakness of the greenback.
A solid surpass of this threshold would open space for new rallies, with a first target placed at $1,835, while the next key resistances are located at $1,860, $1,875 and $1,915/1,920. Vice versa only a decline below $1,890 could be seen as a signal of weakness.
Kinesis Silver Analysis
Silver is showing an interesting sign of recovery. After having been forgotten by investors for weeks, the price has managed to surpass the first resistance placed at $24. The current rebound is finding strength and could be the beginning of a new positive movement. The next few trading sessions will tell us more about the solidity of the rebound, while both technical and graphical scenarios are improving.
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.
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