Kinesis Macroeconomic Analysis
The Jackson Hole Symposium is finishing today and investors are awaiting Jerome Powell’s speech in order to learn more about the next steps of the monetary policy adopted by the Federal Reserve, and especially about the expected tapering start.
When will the Fed begin reducing the system liquidity? For a non-expert, the exact tapering date will not make a significant difference, whether it will be in late 2021 or even in Q1 2022. For investors, however, this could trigger new market movements.
Probably there is too much focus around the precise timing, while its modality and speed should also be taken into consideration.
A dovish Fed (start in Q1 2022) could help the rally on stocks to continue moving further, while a hawkish decision (start in Q4 2021), probably would strengthen the greenback. This could also be a negative market driver for stocks and potentially for the commodities sector as well.
Kinesis Gold Analysis
Bulls and bears are continuing their silent battle, to determine the gold price. At the moment, there is not a clear winner, even if the positive momentum has taken the lead. Indeed, the fact that gold is holding steady after the recent gain is a positive factor, which is also supported by the most recent (past few hours) rally above $1,800.
From a technical point of view, the overall situation of gold is improving. Bullion has surpassed the resistance zone of $1,790 and could now try to approach the next key level, placed at $1,820, while the graphical analysis remains moderately positive.
Only the hawkish Federal Reserve could trigger some bearish movements, with space in this case for a new test on the support area of $1,750 – 1,760.
Kinesis Silver Analysis
Silver remains in enerving laterality. In the last few days, the price has been moving between $23,4 and $24, without being able to surpass the key resistance zone of $24.
Silver is coming from weeks of weakness, as the technical scenario remains fragile. The Federal Reserve’s decision on the system liquidity, might potentially result in critical consequences for both silver and gold.
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.