Fundamental News and Triggers
Precious Metals continue Santa rally
- Gold prices have risen to $4550 (up 72% year on year) and silver to $72 (up 140% year on year), setting new records, fueled by anticipation of further Fed easing and increased geopolitical tensions.
- Although third-quarter GDP grew at a healthy 4.3% annualised pace, lower consumer confidence in December and unchanged manufacturing output in November have contributed to the assumption that monetary policy may be softened in the coming months.
- The war between Israel and Iran, as well as rising tensions between the United States and Venezuela, have boosted safe-haven flows into gold. Furthermore, US Q3 GDP data fails to strengthen the US Dollar despite increased bets on two Fed rate cuts in 2026, which supports the non-yielding bullion.
- Trump stated that the next Fed chair will be someone who believes in “significantly lower interest rates”. He stated that applicants who disagreed with his ideas would be excluded from consideration for the Fed’s top job. Investors and politicians are likely to be concerned about the Federal Reserve’s independence following these comments.
Technical Triggers
- As suggested, Gold has touched the target resistance of $4500 (~Rs 138,000). Gold broke its previous high of $4400, after two months of consolidation between $3935 and $4400, so this rally is expected to extend further towards $4575(~Rs 140,000) and $5000(~Rs 150,000) in a few weeks.
- As suggested, Silver has touched the second target resistance of $72(~Rs 223,000). I think it’s time to book profits, as the rally seems overdone. We can see a price retracement up to $68 (~Rs 210,000). But, if Silver continues its bullish momentum, the next target is $75 (Rs 235,000).
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