Gold & Silver Market Analysis for Wednesday 4th of August

Gold getting closer again to the resistance zone of $1,820

The gold price remains traded in a small lateral trading range, unable to find a clear direction. The recent attempts to break up the resistance levels of $1,820 and $1,835 failed to find consistency, while gold returned within the lateral trading range between $1,790 and $1,820.

Over the last few hours, the gold price is trying again to test the first resistance placed at $1,820, confirming the improving momentum for bullion.

Gold price $/gram from Kinesis Exchange

In the last few days, we have not seen big changes. Bulls seem to be close to taking control, but so far every time that gold is trying to surpass key resistances, sellers are becoming active again. This uncertainty is definitely related to the “wait and see” model, shown by the Federal Reserve.

The way forward seems to be signalled, with tapering coming in a few months, although we will have to wait much longer for the first interesting hike. However, the hesitations about the timing of the next movements of the Federal Reserve are reflected in the markets and in bullion prices as well.

Today’s ADP National Employment Report and nonfarm payrolls (expected on Friday) are now the first two key elements worth monitoring, as they can in some way influence the Federal Reserve’s next decisions.

The greenback could benefit from data above expectations, as if they can meet that, the Federal Reserve would be forced to act relatively soon. Vice versa, the figures behind the forecast could allow the Federal Open Market Committee (FOMC) to continue with the “wait and see” model of the last few months, in order to enable the US economy to further improve.

Kinesis Silver Analysis

Gold price is relatively steady just above $1,800, while the situation does not seem to be different on silver. Indeed, also the grey metal is showing little volatility, remaining flat at $25,60/25,70.

The technical picture for silver appears to be slowly improving, as the price has already recovered over 4% from the bottom reached last week. Anyway, only a solid recovery above the resistance zone of $26 and S26,5 will be seen as a signal of strength, opening space for further gains.

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.