Gold & Silver Market Analysis for Wednesday 13th October

Kinesis Money Macroeconomic Analysis

Today’s economic calendar is relatively busy, with significant macroeconomic data to consider from several countries. 

Starting with the US, it’s important to first observe the US CPI and the minutes of the last Federal Open Market Committee (FOMC) meeting. The CPI, an acronym for the Consumer Price Index, will enlighten investors about the recent pressure of inflation on the economic system. 

Any data above the forecast of 0.2% could be a driver that prompts the Federal Reserve to act rapidly with the beginning of tapering. 

Alternatively, data below what was expected could cause increasing uncertainty about the timing of the Fed’s next movements. It should be noted that recent US labour data (nonfarm payrolls) already deviated from those expectations. 

Another piece of macroeconomic data following a similarly weak trend will prove to be even more important, potentially complicating the timing for scaling back bond purchases.

It could seem obvious, but it is worth repeating that: from a theoretical point of view, data above expectations has a good chance of triggering further rallies of the greenback – adding pressure on gold and silver. On the other hand, a moderate CPI below the forecast could pull down the dollar and, in doing so, elevate bullion. 

With regard to the FOMC’s meeting minutes, traders and investors are curious to discover more about the Federal Reserve’s predictions for the US economy and if there will be a further suggestion as to the timing of tapering.

Kinesis Money Gold Analysis

The gold price is holding strong above the $1,750 mark. Bullion jumped above $1,760 per ounce, lifted by a modest decline of the US 10-year-yields leaving the price just a few dollars from the $1,770 resistance zone. A solid surpass of this level could open space for new recoveries – a good sign for investors.

In the last few days, buyers were strongly active in the $1,750 region, with significant bids that resulted in a sustained price above this support zone.

A fall below this level could denote weakness, but now there is a heightened chance the price will hold above the resistance zone of $1,770. 

What is clear: investors are once again anticipatory and looking on as US inflation data and the FOMC minutes (Federal Open Market Committee) are unveiled.

Kinesis Money Silver Analysis

The silver price has climbed again above the resistance zone of $22.7 as buyers are building increasing amounts of pressure. We are seeing a growing number of positive signals for the precious metal, improving both the technical and the graphical scenario. A confirmation above $22.7 will be another positive element, opening space for new rallies of the silver price.

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.