Gold
Gold prices have seen their biggest daily move since November 9th last year so far today. The volatile move lower, followed by a sharp bounce off the lows, comes on the back of the July US jobs report on Friday. The US Dollar has been sharply higher in the wake of the release which saw the headline US NFP coming in at 943k, beating expectations of an 870k. Along with the solid upside beat, the prior reading was revised higher to 938k from 850k. Additionally, the unemployment rate was seen falling sharply to 5.4% from the prior month’s 5.9%, beating expectations of a 5.7% reading. Finally, average hourly earnings, which are key to inflation expectations, rose to 0.4% on the month, beating the expected 0.3% reading.
In all, it was a firmly bullish set of labour data out of the US which has now once again reignited Fed tapering expectations. While the Fed confirmed at its last meeting that policy would remain unchanged until significant further progress had been seen within the economy, Friday’s data is clear sign of the economy having advanced further along the path to recovery.
The big focus this week is now on US CPI, due on Wednesday. Following Friday’s bumper data, if July CPI is seen printing strongly also, this will send USD firmly higher, sealing the fate of gold in the near term. Following that reading, we also have US PPI due on Thursday which could add further fuel to the fire if a strong reading is seen on that release too.
Silver
Silver prices have been shunted lower at the start of the week also. With the near term USD outlook skewed towards higher prices, the metals complex will likely remain under pressure as we head through the week. Only a miss on the July CPI figure will be able to prevent further downside from here.
Technical Views
Gold
The sharp move lower in gold today has seen price breaking below the 1763.88 level trading as low as a breach of the 1700 level where the bear channel low saw buyers stepping in. Price has since rebounded to just below the 1763.88 level as of writing. However, with both MACD and RSI bearish, focus is on further downside for now.
Silver
The collapse in silver prices today saw the market breaking below the 24.0073 level as well as the bear channel low. Price has so far found support into a test of the 22.3205 level. As with gold, however, with MACD and RSI both bearish, the focus is on further downside for now.
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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.