By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all

Gold and Silver prices rocketed 4%and 5% respectively on a weekly basis and showed a stellar performance as escalating geopolitical tensions improved safe-heaven demand. Because of escalating Israel-Hamas tensions and increased anticipation that the Fed would not raise interest rates further this year, precious metals had their best week in seven months. Further supporting factors are:

• More than a million residents of Northern Gaza have been ordered to leave their homes by the Israeli military, indicating a potential intensification of the war.

• The CME FedWatch Tool estimates that there is a 92% chance that the FED will maintain interest rates at 5.25 to 5.50%. And there are 30% chance, during either of the final two monetary policy meetings in 2023, there will be another interest rate increase.

• According to data released by the University of Michigan, the Consumer Confidence Index fell to 63.0 in October from 67.4 projected and 68.1 in September.

• Fears of a worldwide recession are still there as China’s CPI remained flat in September despite investors’ expectations for an increase of 0.2%. Due to weak demand and a rising unemployment rate, the Chinese economy is fighting to revive.

Investors are now focusing on Fed Chair Jerome Powell’s speech, which is slated for next week and will give hints about the expected course of action for monetary policy at the meeting on November 1. The price of the precious metal has risen over the 200-period exponential moving average (EMA), which fluctuates about $1900, indicating a bullish long-term trend.

 

Indian Gold Daily Chart

As suggested last week, Gold and Silver prices were in the oversold zone and have touched important support levels, prices are expected to rebound, the same thing happened. Rs 58500 targetfor Gold and Rs 70000 target for Silver was achieved. This rally is expected to continue towards $1965 (Rs 60000) for gold.

 

Indian Silver Weekly Chart

Silver has formed a bullish reversal pattern on weekly charts. It seems the bottom has been
made for the shortterm and the rally is expected to continue towards $24 (Rs 73500). Buyon dips should be the strategy used.

 

 

 

 

 

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