Gold & Silver Market Analysis for Monday 1st November

Kinesis Money Macroeconomic Analysis

On the agenda for this week, central banks will hold their respective meetings, during which time, there will be plenty of macroeconomic data to consider. Tomorrow will see the start of the long-awaited Federal Open Market Committee (FOMC) meeting, to be finalised on Wednesday with the press release. 

This week, Jerome Powell is expected to announce the beginning of tapering, with the process set to start next month. It appears that investors were expecting this move, anxious to discover further details about the timing and the pace of the process. There will also be an indication of the first interest rate hike, which is expected by the end of the first quarter (Q1) of 2022.

During the week, US labour data will be released, beginning with the ADP National Employment Report on Wednesday, followed by non-farm payrolls and jobless claims to be reported on Friday. The Federal Reserve will be closely monitoring this data, so as to decide the timing and the next steps of monetary policy. 

The Bank of Japan’s monetary report will be published this week. In addition, the Reserve Bank of Australia’s decision on the country’s interest rate is expected to stay steady, at a historical low of 0.10%.

On Thursday, the focus will be on the Bank of England’s meeting. Last month, all 9 members of the board voted to keep rates the same, at a percentage of 0.10%. 

The majority of analysts are now forecasting a disproportionate split of 6-3, voting in favour of keeping rates unchanged. This will prepare the financial markets for a first-rate hike in the next meeting.

Kinesis Money Gold Analysis

On Friday we saw a significant rebound of the US dollar, with the EUR/USD trade pair losing 1% in just a few hours, while the dollar index jumped above 94. As predicted, this sharp rebound of the greenback had a significant impact on the gold price as well, pushing some investors to sell their bullion.

Gold lost 0.5%, declining to 1,785, however, the major trend has not yet changed. The gold price remains above the first two key zones, placed at $1,770 and $1,750. Only a clear fall below $1,745 – 1,750 will change the current lateral trend.

A recovery of $1,800 would be positive, while a stronger bullish signal could be witnessed with a clear surpass of $1,820 – 1,830, leaving space for further rallies. Moreover, there are two main market drivers still to come this week: the FOMC meeting and the release of non-farm payrolls.

Kinesis Money Silver Analysis

The silver price is being traded just below $24, with the bullish trend seen over the last few weeks now wavering, since the price was unable to rebound. 

A signal of weakness will be witnessed if the price falls below $23.7, while a surpass of the resistance zones placed at 24.3 and 24.5 could open a path for new recoveries. This would confirm the positive impulses seen in October and increase the chances of silver surpassing the recent peak of $24.9.

Carlo Alberto De Casa is an external 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.