Gold
The yellow metal has started the week on a softer footing following the rally seen on Friday in response to the US labour reports. The Dollar traded lower on the back of Friday’s release which saw the headline NFP number coming in at a wildly disappointing 230k, well below the 750k estimated and the 930k seen over the prior month. While average hourly earnings were sharply higher, and the unemployment rate seen falling back to 5.2%, the miss on the headline data was enough to send USD further lower, extending a week of losses.
On the back of Fed’s Powell’s dovish comments a week prior at the Jackson Hole symposium, last week’s data has done little to offer any near term hope for USD bulls. While the greenback is seeing a mild bid today, with the US off for the labour day holiday, the move is likely to fizzle out. Looking ahead this week, the focus will be on US CPI and retail sales. Given the disappointment with the August labour reports, both indicators would need to see a firm beat to inspire any reversal higher in the Dollar with the greater risk being that if data underperforms, the Dollar rout will deepen.
Silver
Silver prices have tracked the moves higher in gold over the last week with the market now finally beginning to break out of the base of consolidation which has framed price action since mid-August. With a weaker US Dollar and higher equities prices supporting, the near-term outlook remains positive for silver though, as with gold, this week’s US data holds the potential to create volatility.
Technical Views
Gold
The recent rally in gold has seen the market breaking out above the bear channel top from YTD highs with price now testing the 1826.71 level. With both MACD and RSI turned bullish here, the focus is on further upside with the 1871.04 level the next target for bulls.
Silver
The rally in silver prices has seen the market breaking above the recent bear channel and above the 24.0073 level. With indicators both turned bullish here, while 24.0073 holds, the next challenge will be the 25.1018 – 25.5384 region, a break of which will put the focus on the 26.5711 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.