Gold & Silver Market Analysis - Wednesday 24th November

Kinesis Money Macroeconomic Analysis

Today’s market analysis firstly takes note of the recovery of gold. Expectations surrounding a quickening to tapering have been an obstacle to the gold price, as it is attempting to strengthen. The publication of recent US inflation figures could push the Federal Reserve to quicken the pace of quantitative easing in order to mitigate the growth of prices.

These pre-emptive expectations generated a further rally from the greenback. Furthermore, the dollar index, which measures the strength of the US dollar against a basket of other currencies, has jumped above 96. Reaching its highest level since July 2020, the dollar now remains steady at 96.6. 

Meanwhile, the US 10 Year Treasury yield accelerated to the previous rate of 1.60% – market sentiment must suspect that the first-rate raise from the Federal Reserve is imminent.

Earlier this week, Joe Biden renominated Jerome Powell as Chairman of the Federal Reserve, in what will be his second term. This decision does not imply that there will be any imminent change of monetary policy. Although, it has been understood by the markets as confirmation that restrictive monetary policies have only just begun.

Kinesis Money Gold Analysis

In the last few days, the technical picture for bullion has taken a hit. Indeed, gold could not hold out in the lateral range of $1,830 – 1,875. It fell below the support level of $1,830, accelerating to test and break down the following support zone of $1,800.

After reaching a low of $1,780, gold is now showing some interesting rebound signals. Furthermore, gold moved closer to the former support, and now resistance zone, of $1,800.

Notably, gold is 4% cheaper than it was a week ago, and some investors are clearly trying to “buy the dips” – investor slang for when an asset has dropped in price. In their hopes for further rebounds, investors are confident even though the technical scenario is currently more uncertain. Moreover, the strength of the dollar and rising Treasury yields could, in fact, generate further volatility on bullion in the weeks to come.

Kinesis Money Silver Analysis

The silver price is settling down after yesterday’s debacle seen on the market. Losing 3% of its value with a fall to $23.5, the decline shows silver presented with the same influencing factors as gold. In particular, silver has taken a hit from the prevailing strength of the US Dollar. In addition to this, public sentiment surrounding the Federal Reserve’s next moves has also resulted in this significant decline. 

The silver market price has managed to temporarily halt a correction, after reaching a low of $23.3. Technically, there is a key support zone placed at $23.1-23.3, which will be crucial for silver; silver may hold out on these levels in order to make a quick rebound. However, there is always the chance for an alternative, with the possibility of further decline. 

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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.