Gold & Silver Market Analysis for Monday 27th September

Macroeconomic Analysis

Uncertainty is –  once again – one of the keywords for the week ahead, in a scenario that could be supportive of the gold price.

In Germany, the election left a relatively complicated puzzle to solve. Analysts are forecasting that the creation of a new government coalition could take months.

In Asia, Evergrande’s financial trouble is far from being resolved, with the $300bn indebted Chinese estate company risking failure to repay its loans.

The United Kingdom is experiencing a temporary fuel shortage, with many petrol stations closed, as the lack of lorry drivers supplying gas to petrol stations is becoming a mainstream matter. Additionally, the new Covid-19 variants are continuing to spread in all continents. Despite this, stocks started the new week in green.

Investors have digested the FOMC meeting and are looking to the macroeconomic calendar of this week, with Lagarde (ECB), Bailey (Bank of England) and Powell (Federal Reserve) set to speak in several meetings.

On Thursday morning, the Chinese manufacturing PMI will be released. That same day, investors will find out the UK GDP (Gross domestic product) for the second quarter of the year, followed by the same data for the U.S and American initial jobless claims – another report which is carefully monitored by the Fed. On Friday, data displaying inflation in the Eurozone will be an important insight.

Kinesis Money Gold Analysis

The new week for gold started in green, with bullion up by 0,4% at $1,760. This past week, all serious rebound attempts were curbed by the FOMC meeting. The FOMC statement revealed some hawkish elements, related to growing expectations for the interest rate hike in 2022 and 2023.

Overall, it seems that the markets focused more on this, rather than on other elements that could be supportive of gold, such as the Evergrande crisis. Indeed, the overall uncertainty around markets could generate a growth in gold and precious metals demand in the medium – long term.

The technical picture remains unchanged, with the first key support at $1,745 – 1,750, while a clear surpass of $1,760 will open a space for further recoveries.

Kinesis Money Silver Analysis

The silver price has been struggling to show any solid rebound in the last few weeks.

On Monday, early silver trading is gaining almost 1%, jumping to $22,6.

The short term trend has been affected – particularly for gold – by hawkish expectations from the upcoming decisions to be made by the Federal Reserve. Indeed, silver YTD lost around 15%. Although, the medium and long term picture seems much brighter, with growing demand expected from both the industrial and jewellery markets. Additionally, the investment sector could also play a key role in helping silver to rebound.

Carlo Alberto De Casa is 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.