Traders also focused on dynamics of debt markets. The yield of 30-year Treasuries tested new highs, climbing above the 5.64% level. The yield of 10-year Treasuries moved above the 5.28% level.
The technical picture remains unchanged as USD/JPY is stuck below the 50 MA at 157.56. If USD/JPY moves above the 50 MA, it will head towards the nearest resistance level at 158.00 – 158.50. A successful test of this level will push USD/JPY towards the next resistance at 160.00 – 160.50.
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Spot Gold is trading higher Wednesday, however, the main trend remains down according to the daily swing chart. A trade through the lower top at $4,399.67 will change the main trend to up. Monday’s low at $4,110.87 is the immediate downside trigger. A trade through that price will signal a resumption of the downtrend.
The long-term retracement zone is $4,319.61 to $4,230.51. Gold broke through the lower boundary Monday, turning the zone into resistance. The 50-day moving average at $4,323.00 is also nearby.
The 200-day moving average at $4,539.29 is providing long-term resistance and trend direction. Gold is trading below both moving averages.
Wednesday’s high at $4,202.39 is only a high at this point. It does not establish a new top or change the swing-chart structure. The next major support is the August swing bottom at $3,996.06, followed by the main bottom at $3,942.10.
What to Watch
The PCE report hits with the October hike trade already pulled back and a December increase still heavily priced. Williams bought the market some time. Barr isn’t convinced the Fed can afford it. Non-Farm Payrolls follow on Friday, so whatever PCE starts, the jobs data gets to finish.
A softer core PCE number could extend the pullback in yields and give buyers a shot at $4,230.51. A firm reading would leave Wednesday’s rally looking like short-covering and put Monday’s low back in play.
The bias leans bearish with the main trend down on the daily swing chart. Buyers came in off Monday’s $4,110.87 low. Wednesday morning’s rally remains well short of the level gold broke through Monday. Sellers are still sitting there, untouched by the bounce. Buyers haven’t touched $4,230.51 yet.
Elevated U.S. inflation and frequent issuance of U.S. Treasuries have driven the 10-year U.S. Treasury note yield above 3.6% and put a lid on bonds, supporting the greenback. The U.S. Dollar is set for a strong month.
It is true that major rises in energy costs as a result of the conflict in Iran have hurt the euro recently. Along with rising geopolitical tensions, French bonds are once again far less attractive than their German counterparts, pushing yields up by 115 basis points. The euro looks set for its worst monthly performance against the dollar in over a year.
Looking at sterling, Britain’s budget deficit remains large, but recent actions by the government have signaled a greater commitment to reigning in spending. Along with signs of tighter spending, Bank of England data has shown that unsecured consumer lending picked up in August. This raises concerns about the health of the UK labor market, and further complicates the challenges posed by the Bank’s efforts to control inflation.
Looking at these factors, the dollar has a moderately bullish bias against the euro and a bearish bias against the pound. Major moves in either currency are expected to come from the release of the U.S. PCE report and the jobs report on Friday.
Natural Gas (NG) is currently trading at $3.03 on the 1-hour chart. It recently broke below a rising trendline and both the 50 and 100 hour moving averages, and is now trading below all three. Currently, NG is attempting to find support near the $3.00 level. However, as the rising trendline has recently been broken, the 100 hour moving average has crossed below the 50 hour moving average, and the 50 hour moving average is below the 200 hour moving average, the recent price action shows that the market structure is bearish and further work is needed by buyers to change the overall trend.
Initially, I would expect resistance to be found near the $3.10 level. Above $3.10, expect additional resistance to be found near the $3.20 and $3.27 levels. As mentioned previously, further support is found near the $3.00 level, with additional support expected near the $2.95 and $2.86 levels.
Rising timeframes of lower trading volume have been dominated by the bearish trend, and the RSI has recently been trending lower. Until $3.10 is reclaimed, I expect further bearish price action. I would expect resistance to be found near the $3.20 level and support to be found near the $3.00 level. A move below $3.00 would open further bearish price action near the $2.86 and $2.95 levels.
The pair’s price took advantage of the recurring negative pressure to confirm the bearish scenario previously suggested, continuing to form bearish waves and currently reaching 177.35, surpassing the first additional target proposed in the previous report.
The stability below the additional barrier at 179.45, combined with the main indicators maintaining negative momentum, these factors make us prefer more negative attempts, which could target 176.75. A break below this level could extend the losses toward 175.00 in the near term.
The expected trading range for today is between 176.75 and 178.50.
Coffee price successfully held above the support level near 269.00, forming strong bullish waves and achieving some of the previously suggested gains by currently reaching 288.00.
As shown on the attached chart, stochastic is approaching the 80 level, increasing the chances of the price gathering the positive momentum needed to resume its bullish attack, which could target 299.25, followed by 311.00.
The expected trading range for today is between 283.00 and 299.25.
According to FedWatch Tool, the probability of a rate hike at the next meeting in October has increased to 70.3%. Traders expect that the federal funds rate would be raised by 100 bps by the end of 2027. Expectations of a series of rate hikes put significant pressure on gold that pays no interest.
U.S. dollar gained some ground against a broad basket of currencies as forex traders focused on developments in debt market. Stronger dollar put additional pressure on gold in today’s trading session.
I’d note that one of the reasons for the sell-off in gold markets could be technical. The strong pullback in debt markets could have forced investors to raise cash elsewhere, forcing them to sell gold.
Currently, gold is trying to settle below the support level at $4160 – $4180. In case gold manages to settle below the $4160 level, it will head towards the next support, which is located in the $4000 – $4020 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
The Pound US Dollar (GBP/USD) exchange rate slipped lower on Tuesday as a subdued market mood continued to favour safe-haven currencies.
At the time of writing, GBP/USD was trading at around $1.3227, down approximately 0.2% from Tuesday’s opening levels.
The US Dollar (USD) edged higher on Tuesday as persistent strength in energy prices encouraged investors to favour defensive assets.
Brent crude continued to trade comfortably above $100 a barrel amid uncertainty surrounding attempts to bring the US-Iran conflict to an end and negotiations over the possible reopening of the Strait of Hormuz.
The ‘Greenback’ was also benefiting from firm Federal Reserve interest rate expectations, with markets pricing in around a 72% probability of another 25-basis-point rate increase in October.
However, USD gains remained relatively restrained in early Tuesday trade as investors looked ahead to the latest JOLTS job openings figures.
A weaker-than-expected reading could point to a cooling US labour market and prompt markets to scale back their expectations for further Fed tightening.
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The Pound (GBP) lacked a clear sense of direction on Tuesday, with Sterling moving within a narrow range as the UK economic calendar offered little in the way of fresh market-moving data.
Investors were also reluctant to make significant bets ahead of Prime Minister Andy Burnham’s keynote speech at the Labour Party conference.
Burnham is expected to discuss several long-running policy issues, including potential changes to the pension triple lock and his position on the UK’s relationship with the European Union.
Any comments on closer ties with the EU could attract attention from currency markets.
Near-Term GBP/USD Forecast: Core PCE Inflation in Focus
Looking ahead, the main catalyst for the Pound US Dollar (GBP/USD) exchange rate on Wednesday is likely to be the release of the latest core PCE price index.
The Federal Reserve’s preferred measure of underlying inflation is expected to show that price pressures increased again in August.
A stronger-than-expected reading could reinforce expectations of an October rate hike and provide further support for the US Dollar.
UK investors will also have the final estimate of second-quarter GDP to consider.
However, barring a significant revision to the previous reading, Sterling may remain more sensitive to broader shifts in global risk appetite than domestic economic developments.
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JOLTs Job Openings decreased from 7.335 million (revised from 7.271 million) to 7.079 million, compared to analyst forecast of 7.23 million.
Traders also had a chance to take a look at the CB Consumer Confidence report. The report showed that CB Consumer Confidence declined from 88.6 (revised from 89.4) in August to 81.9 in September, compared to analyst consensus of 89.2.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 101.50 – 101.65. In case U.S. Dollar Index manages to settle above the 101.65 level, it will head towards the next resistance, which is located in the 102.35 – 102.50 range. RSI is in the overbought territory, but there is some room to gain additional upside momentum in the near term.
Silver attracts some buyers after touching a fresh low since August 5 earlier this Tuesday.
The oversold daily RSI prompts some intraday short-covering, warranting caution for bulls.
Any further recovery move could be seen as a selling opportunity and fade rather quickly.
Silver (XAG/USD) registers a modest recovery from the $60.30 area, or the lowest level since August 5, touched earlier this Tuesday, though it lacks follow-through. Nevertheless, the white metal sticks to intraday gains through the early European session and currently trades just below the $61.00 mark, up over 0.50% for the day.
From a technical perspective, the Relative Strength Index (RSI) hovers near oversold levels around 28, hinting at stretched downside conditions and prompting some intraday short-covering. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with a weak profile, not yet signaling a confirmed reversal. Moreover, the XAG/USD holds well beneath the 200-period Exponential Moving Average (EMA) at $64.64, maintaining a bearish near-term tone.
Hence, any subsequent move up is likely to confront initial resistance near the $61.00 round figure. Some follow-through buying should pave the way for a further recovery to the $61.80-$61.85 intermediate hurdle, before the XAG/USD climbs further beyond the $62.00 and aims to test the $62.40-$62.45 horizontal support breakpoint. The latter should act as a key pivotal point, and sustained strength beyond it is needed to back the case for any further appreciating move for the white metal.
On the downside, weakness there is no meaningful support, and traders may look to the $60.00 psychological round number to gauge the next leg of a directional move. A convincing break should pave the way for a fall to the $59.40-$59.35 support before the XAG/USD slides further towards the $59.00 mark. If the metal extends its decline, bears might then aim to challenge the August monthly low, around the $56.60-$56.55 zone, with some intermediate support near the $57.00 round figure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
