Gold & Silver Market Analysis for Monday 22nd November

Kinesis Money Macroeconomic Analysis

In the last few days, the greenback has strengthened, with the dollar index positioned just above 96. 

The latest inflation data was recorded with the backdrop of climbing rates of Covid-19 which, in effect, has worsened the scenario. It is no surprise that there has been a pause in stock rallies, as investors begin to carefully monitor the situation as it evolves. Hence, the appetite for risk seen in the last 18 months could lessen if the overall outlook worsens significantly.

With the main focus of the agenda on inflation data, other events of interest in the macroeconomic calendar include the release of official US GDP (Gross Domestic Product) data and initial jobless claims. Both of these figures will be released on Wednesday, while Thursday will see the New York stock exchange (NYSE) closed for Thanksgiving. 

Other items of interest include the meeting of the New Zealand Central Bank, with the release of their monetary policy statement, giving investors a clearer insight into the next steps that will be taken. The Reserve Bank of New Zealand is set to raise rates from 0.50% to 0.75%. Although, this is yet to be confirmed.

Kinesis Money Gold Analysis 

Bullion closed Friday’s trading session declining below $1,850. The strength of the US Dollar and the comments of Federal Reserve Board Member, Christopher Wallace, suggested the possibility of quickening the pace of tapering. This may have been the main catalyst behind the retracement.

Early trading this morning confirmed a moderate, short-term, bearish sentiment for gold, as bullion extended its decline to $1,840.

Overall, this modest decline has not changed the main trend for gold, as bullion remains to be traded above the key support zones of $1,830 and 1,800, in a bullish environment.

From a technical point of view, a return to prices seen at the height of last week’s trading – in the region of $1,875 – would represent a positive signal for gold. However, a break up of these levels could open space for further rallies. 

On the other hand, the most likely scenario to be expected is a consolidation phase. As with the one seen in the last few days, with the prices moving between $1,830 and $1,875, investors will be looking on and waiting for new market drivers.

Kinesis Money Silver Analysis

Starting the week, the silver price is attempting recovery and reaching the resistance level of $24.9, holding fast at the support zone of $24.6. This is a positive signal for silver, as it attempts to recover momentum after the recent decline from $25.4 – the height reached ten days ago – to $24.6. 

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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.