Gold
Gold prices have started the week on a firmer footing with the safe haven asset finding a bid over the European morning on Monday. The rally comes amidst some softening in USD following the June employment reports released on Friday. While the headline jobs figure was well above consensus at 850k vs 725k expected, the unemployment rate was seen unexpectedly ticking higher to 5.9% from the prior month’s 5.8% reading, despite forecasts for a further reduction to 5.6%. Similarly, average hourly earnings weakened to 0.3% from 0.4% prior, further taking the shine off the headline release.
In all, while the NFP reading was strong, the weakness in other areas prevented USD from taking lift off and provided further evidence of the Fed’s message that the recovery is on going and there is still a way to go. Looking ahead this week, the main focus will be on the FOMC meeting minutes mid week. Following the upward revision to the Fed’s dot plot forecasts, as well as the improved growth and economic forecasts, the details form the meeting are likely to be hawkish, offering upside risks for USD into the middle of the week, which should create headwinds for gold.
Silver
Silver prices are on the climb this week also, tracking the moves in gold. The fall back in USD is creating better condition at the start of the week though, again, upside USD risks in to the FOMC minutes this week could see the silver rally stall. Silver prices had been heavily lower over the last few weeks as a result of the rebound in USD though ongoing strength in equities markets ahs helped offset some of this downside.
Technical Views
Gold
Gold prices briefly pierced below the 1763.88 level last week before reversing to trade back above the level. With the MACD rapidly approaching neutral and the RSI turning higher, the market now looks on course to test the 1826.71 level next. This week be a key pivot for the market with a failure here likely marking the return to downside while a break above will open the way for a move up to the 1919.92 level next.
Silver
The rally in silver prices this week has seen price trading back up to test the 26.5711. With MACD turning bullish here and the RSI moving higher, while above the level, there is room for a test of the 27.4502 level next. To the downside, 25.5384 remains the key level to monitor as support.
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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.