By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
Gold and Silver showed a stellar performance this week by rising 2% and 6.5% respectively. Gold and Silver prices are close to their resistance level of $2000 and $24 respectively again as lower-than expected U.S. inflation figures have bolstered expectations of a definite FED pause.
This week has seen an uptick in market risk appetite following the announcement of more moderate U.S. inflation data, which suggests the Federal Reserve may be done raising interest rates. Furthermore, other nations—including the United States and Iran—have not yet played a significant role in the Israel-Hamas conflict, despite several weeks having passed. It’s still an uncomfortable scenario, though.
Additionally, during the APEC Summit in San Francisco on Wednesday afternoon, U.S. President Joe Biden and Chinese President Xi Jinping met to talk about a range of geopolitical, trade, and economic concerns. Both leaders understood that in order to resolve those problems, cooperation was required. In order to seem non-weak on the issue, Biden sought to reduce tensions with China.
Congress has approved a stopgap financing bill that would keep the government open through early 2024 and prevent a government shutdown on Friday. It is currently on President Biden’s desk, giving Congress members time to get ready for talks on full-year appropriations between the two houses. Biden is anticipated to ratify the legislation.
Demand for safe-haven assets increased as worries about an oncoming global recession were raised by the eurozone’s and Japan’s weak economic reports. The largest lift to the yellow metal, however, came on Thursday when numbers revealed that, for the fourth consecutive week, U.S. jobless claims increased more than anticipated, indicating further weakening in the labour market. The bulls in metals are focusing on how the Fed’s more accommodating policies are continuing to weaken the currency, driving down Treasury rates, and increasing demand for gold globally now that interest rates may have peaked.
This week, the short-term technical positions for gold and silver have improved, particularly for silver. Shorter-term speculators are showing some interest in buying based on charts as a result. Gold prices have retraced 38.2% (~ Rs 56500) Fibonacci retracement of the rally which started from 56000 to Rs 61600. The rally is gaining steam again with the next target for Gold being a previous high of $2018 (~Rs 61600) and then $2045 (~ Rs 62500).
Indian Gold Daily Chart
Silver has formed a bullish engulfing pattern on weekly charts with resistance at $24 of the symmetrical wedge pattern. Silver gave a false breakdown on the rising uptrend line, but then prices recovered then on. Silver prices need to sustain above $24 to resume their uptrend again and head towards $25.2(~Rs 76000) and $26.4 (~Rs 78000).
International Silver Weekly Chart
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