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.

 

 

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