Precious Metals on the verge of a breakout

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

Following another uncertain start to the week, gold gained positive momentum and rose to one month, above $2380, as poor macroeconomic data releases from the United States impacted the US dollar. Recent US economic data, particularly a decline in the service sector and weaker-than-expected employment numbers suggest a dovish outlook for the Fed’s next monetary policy measures. These reasons contribute to the overwhelming belief that the Fed would cut interest rates, with a market probability of a cut by September presently at 73%.

Furthermore, continued political uncertainty in Europe, particularly in France and the United Kingdom, has an impact on the Euro currency, which in turn influences the USD and, indirectly, gold prices. Furthermore, ongoing geopolitical concerns in the Middle East fuel demand for safe-haven assets such as gold.

Gold is trading in a range with a descending triangle with lower highs and higher lows. The triangle is becoming narrower and narrower every week, so a breakout is imminent. A sustainable close above $2380 (Rs 73000) will confirm an upside breakout and a sustainable close below $2300 (Rs 71000) will confirm a downside breakout. We can see a 4-5% move on either side breakout.

Silver is trading in a range with a descending trend channel with lower highs and lower lows. A sustainable close above $31(Rs 92500) will give a breakout towards the upside, while a sustainable close below $29 (Rs 89000) will give a breakout towards the downside. We can see a 4-5% move on either side breakout.

 

 

Disclaimer: This report contains the author’s opinion, which is not to be construed as investment advice. The author, Directors, and other employees of Augmont Enterprise Private Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The opinions mentioned above are based on information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors other employees and any affiliates of Augmont Enterprise Private Ltd cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or implied promise, guarantee or implication by or from Augmont Enterprise Private Ltd. that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purposes and are not to be construed as investment advice.

Share on