Expectation of a rate cut rally starts in precious metals

Fundamental News and Triggers

  • This week, the precious metals have seen significant increases as traders have gradually factored in expectations that the Fed would start lowering interest rates in September with the probability rising over 70%.
  • The Bank of Canada’s rate cut and the expectation of the European Central Bank’s rate cut, which was widely anticipated, increased confidence in the global easing of monetary conditions.
  • However, this time around, lower interest rates—especially in the United States—presented stronger opportunities for investing in precious metals, which drove the rise of gold and silver.


Technical Triggers

  • As suggested, if gold prices have strong resistance at $2400 (~Rs 73500), prices are crossed this resistance. Now next target is the previous high of $2450 (~Rs 74500)
  • Silver has formed double top formation around $32.5 (~Rs 96000) on daily charts. Important neckline support is $30 (~Rs 90000), which was broken, but prices didn’t sustain below it, this time. This view is negated as prices trade above $31 (~Rs 92500) and are expected to head higher towards $32 (~Rs 95000) now.


Support and Resistance



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