Posted 10th January 2022

Gold & Silver Market Analysis for Monday 10th January

gold silver market analysis

Kinesis Money Macroeconomic Analysis

Last Friday, the US Bureau of Labor Statistics released the nonfarm payroll data which, safe to say, missed analysts’ expectations. Before the release, the forecasts anticipated an increase of around 400,000 new employees, while the official data certified a growth of only 199,000 job units. 

It should be noted that figures for the months of October and November last year were positively revised, with an additional +141,000 units. Furthermore, the unemployment rate declined to 3.9%, while average wages grew by 0.6% on a monthly basis.

Could these figures change the upcoming decisions of the Fed? 

It’s unlikely, even if they have a wider impact overall. The minutes of the FOMC meeting held in December showed that bankers are focusing more on inflation rather than labour data.

Within the meeting minutes, the word “inflation” was used a total of 75 times, in conjunction with a hawkish emphasis. Therefore, the expectations for at least 3 interest rate hikes in 2022 is reasonable, and further supported, by the rebound of the US Treasury yield seen in the last 10 days.

In this week’s economic calendar, the consumer price index will be revealed on Wednesday, closely followed by the producer price index. These two indicators will be strictly followed by both investors and the Federal Reserve.

Kinesis Money Gold Analysis

Last Friday, the gold price experienced a moderate rebound, after US labour data disappointed investors. On the Forex market, the greenback has lost ground, with the dollar index falling below 96 points. 

To put this in context, bullion jumped from $1,786 to $1,796, confirming an inverse correlation with the dollar. The rebound was curbed by the resistance zone placed at $1,800, meaning that bullion has started this week with a slight decline. Overall, the gold price shows little volatility at present, with only marginal movements (by a few dollars).

January 7 gold price from Kinesis Exchange
Gold price ($/g) chart – 1h view – from Kinesis Exchange

Even if the main focus for the Federal Reserve is on curbing the growth of prices, a weaker US labour market could reduce pressure on the central bank to instigate further hawkish decisions. 

From a technical point of view, a surpass of the $1,800 mark would denote strength for gold, even if a clear positive signal would only come about with a return of the price above the $1,830 resistance zone. 

Kinesis Money Silver Analysis

The weakness of US nonfarm payroll data was a positive catalyst for silver, as well as for gold. The grey metal rebounded in the later trading hours of Friday last week from $22 to $22.4, before slowing down to $22.3 in today’s early trading. 

From a technical point of view, the rebound seen on Friday was encouraging, even if a confirmation signal is still needed. It is true that the medium-term trend remains weak, after the decline of the last few weeks.

The next resistance zones are placed at $23 and $23.4; a surpass of these thresholds would open space for new recoveries. However, a new fall for silver below $22 would be considered a negative signal, with the next support zone target placed at $21.5.

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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.