Gold & Silver Market Analysis for Monday 6th of September

Kinesis Gold Analysis

The tapering will start relatively soon, with the U.S. Central banks most likely to begin reducing the liquidity on the system in the final months of 2021. Despite this, investors’ interest in gold remains at its peak. 

On Friday, after the release of the U.S. nonfarm payrolls, the bullion price broke up the key resistance level of $1,820, getting closer to the 10-week-high of $1,835. Indeed, U.S. labour data was below expectations, with the immediate decline of the Dollar as a result.

The pressure on Jerome Powell to start tapering could probably slow down for a while, enabling the Federal Reserve to wait until December for the beginning of the process.

From a technical point of view, we are still around 12% below the top reached in summer 2020, when bullion surpassed $2,070. however, the scenario continues to improve, opening spaces for a new rebound.

The macroeconomic calendar of the next few days has a few interesting appointments, including the meeting of the Reserve Bank of Australia. Investors’ main focus will probably be the ECB meeting on Thursday. Interest rates will remain at a historical low. However, after the recent inflation jump – there is a certain pressure from Ms Lagarde to reduce the Pepp stimulus (Pandemic Emergency Purchase Programme), announced last year, initiated to counter the economic crisis generated by Covid-19 and lockdown.

Theoretically, any dovish decision could have a positive effect on gold, while hawkish movement could curb the recent rally, even if the main trend still appears positive. 

We should point out that any dovish decision will also strengthen the US dollar, while any reduction of stimulus can lift up the euro. Therefore the effect on gold of the ECB could be varied and more difficult to forecast.

Kinesis Silver Analysis

Silver is finally showing muscles, as investors are rediscovering the metal. The price of the precious metal surpassed the key levels of $24 and 24,3, jumping to $24,8. 

From a technical point of view, we are seeing a clear improvement of the picture, as many indicators are now showing a recovery of bullish sentiment.

The first level to monitor is the psychological threshold of $25. A clear surpass of this zone could open space for further recoveries to $25.5 first and $25.9 later.

Carlo Alberto De Casa is Market Analyst for Kinesis Money.

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.