Kinesis Macroeconomic Analysis
The EUR/USD currency pair has fallen below 1.16 for the first time in over a week, with the greenback recovering strength and the US 10 Year Treasury Yield steady above 1.60%.
Anticipation for tomorrows’ European Central Bank meeting is growing, as investors continue the countdown for the Federal Open Market Committee meeting, scheduled for the 2nd-3rd November.
The majority of quarterly earnings reports released in the last few days have beaten the forecasts, adding fuel to the ‘risk-on’ scenario of the last few months. For the first time, Tesla surpassed both the $1,000 dollar per share mark and the threshold of $1 BN.
Oil and energy commodities are still in the spotlight, as West Texas Intermediate (WTI) exceeded the region of $85 for the first time after the pandemic. This may have the effect of exacerbating investors’ fear about inflation.
Kinesis Gold Price Analysis
This week, the gold price is struggling to hold above $1,800 per ounce. The new trading session started by losing a few dollars, trading at around $1,790 while the bullion price per gram fluctuated between $57.5 and $57.8.
It seems that the recovery of the US Dollar, combined with a strong ‘risk-on’ sentiment in the financial markets, are not holding off further gold rallies. Right now, bullion volatility remains low, which is a positive signal.
The current phase for gold appears as a consolidation after its recent recovery. From a technical point of view, only a clear surpass of the $1,820-1,830 threshold would open space for new rallies.
In the weeks ahead, it seems unlikely that this will be the case as the ECB’s meeting is not forecasted to be a significant market mover for bullion.
On the other hand, a dovish surprise from the Federal Reserve next week could significantly elevate the price. However, the bearish alternative could lead to the price finding its first support zone at the $1,770 mark. Buyers may be active again if the bullion price falls to $1,750.
Kinesis Silver Price Analysis
Yesterday, the silver price retraced, touching the psychological support of $24 before rebounding to $24.2. The technical picture remains positive as the current decline appears to be a temporary correction after a solid rebound.
In fact, silver is still 6.5% above the price it was traded at just a month ago, and around 3 dollars more than the low reached a few weeks ago. This heavily ‘risk-on’ scenario does not seem to be supportive in the short term.
It is likely that recent highs above the region of $24.8 – $24.9 will flip this scenario on its head, opening space for new recoveries.
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.
