Copper price approached the initial corrective target yesterday at $5.6500, to confirm delaying the attempts to resume the bullish trend due to its stability at $5.9700, besides providing negative momentum by its continued leaning below 80 level as appears in the above image.
Therefore, we will keep preferring the temporary negative attempts, which might target $5.6200 and $5.5100, while regaining the bullish trend requires a positive close above the mentioned barrier, to reinforce the chances of recording new historical gains that might begin at $5.6200 and $5.8500.
The expected trading range for today is between $5.6200 and $5.8500
Copper price approached the initial corrective target yesterday at $5.6500, to confirm delaying the attempts to resume the bullish trend due to its stability at $5.9700, besides providing negative momentum by its continued leaning below 80 level as appears in the above image.
Therefore, we will keep preferring the temporary negative attempts, which might target $5.6200 and $5.5100, while regaining the bullish trend requires a positive close above the mentioned barrier, to reinforce the chances of recording new historical gains that might begin at $5.6200 and $5.8500.
The expected trading range for today is between $5.6200 and $5.8500
The Pound to Dollar exchange rate (GBP/USD) regained some composure after renewed equity market losses briefly dragged the pair back to key support levels.
GBP/USD Forecast: Recovery from Test of 1.34 Support
After a calmer start, there were fresh losses in equities which hampered the Pound with the Pound to Dollar (GBP/USD) exchange rate dipping to re-test the 1.3400 level before a recovery to 1.3430 as the dollar lost ground.
According to UoB, there is scope for gains to 1.3505, but added; “On the downside, a breach of 1.3380 could indicate that GBP is likely to range-trade instead of trading with an upward bias.”
HSBC has an end-year GBP/USD forecast of 1.35.
There was no major impact from the latest UK inflation data with geo-political developments dominating domestic and global markets. Events in Davos will continue to be monitored very closely.
Macquarie Group global forex and rates strategist Thierry Wizman commented; “The next step in the ‘Greenland or Bust’ saga is to see whether a common ground, such as NATO joint administration of Greenland, can be reached, starting at Davos this week.”
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He added; “Until that happens the so-called primacy of the U.S. remains at risk of further dissolution, and with it an upending of the geopolitical alignments that have upheld markets in recent years.”
As far as financial markets are concerned, the developments in bond markets will be a key element.
Upward pressure on bond yields unsettled the dollar on Tuesday and had a knock-on effect on the Pound as UK bond yields also moved higher.
According to ING; “Greenland will be the dominant theme today and there may be scope for de-escalation, offering the dollar some support. Trump is meeting EU leaders in Davos today, and if the past year has shown anything, it’s that face‑to‑face engagement tends to provide the best opportunity for tensions with the US president to ease.”
MUFG noted; “The news yesterday that the Danish pension fund Akademikerpension was exiting the US Treasury market certainly added to the speculation of further foreign investor selling.”
It notes that this is not a sum which would destabilise the markets.
Nevertheless, it added; “But another announcement like the Danish one can certainly reinforce the negative momentum and feed the speculation of a broader sell-off of US assets. Investors sense that the taking of Greenland could be a step too far and warrants a more serious flight of capital from the US than what took place in April last year. The selling then was fleeting.”
Rabobank commented on the potential lack of alternatives; “The question remains, however; if we see mass dumping from European institutions, where do the dollars go?”
Domestically, the headline UK inflation rate increased to 3.4% from 3.2% and marginally above consensus forecasts of 3.3% with the core rate held at 3.2%.
Markets continued to price in around a 20% chance of a Bank of England rate cut at the March meeting.
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Silver price (XAG/USD) retreats on Wednesday after reaching a daily high of $95.56 after US President Donald Trump eased his tone in his Davos speech, saying that he is ready to negotiate Greenland with Denmark. At the time of writing, XAG/USD trades at $93.57, down over 1% after reaching a record high of $95.89 on Tuesday.
XAG/USD Price Forecast: Technical outlook
Silver’s daily chart suggests the grey metal is upward biased, but the parabolic move seems to have paused as the Relative Strength Index (RSI) exited from overbought territory and shows signs of negative divergence.
Despite this, bears are not out of the woods as they must clear the $90.00 figure before challenging the latest cycle low of $86.45 reached on January 15. In that outcome, Silver could dive towards the 20-day SMA at $80.63.
On the flip side, if XAG/USD is to extend its gains, buyers need to push prices above the record high of $95.89, followed by the $100.00 milestone.
XAG/USD Price Chart – Daily
XAG/USD Daily Chart
(This story was corrected on January 21 at 17:11 to say in the first paragraph that the $95.56 price is a daily high, not an all-time high.)
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.
The market has clearly spoken that it does not like the rising interest rates in Japan, as traders continue to punish the bond markets in Tokyo.
The US dollar has gone back and forth against the Japanese yen during trading on Wednesday as we continue to see a lot of choppiness right around this 158 yen level. It does make a certain amount of sense because we have the Bank of Japan interest rate decision happening on Friday, and that obviously will have a lot to do with where we go next.
While a cut or a hike isn’t necessarily expected, what people will be watching is the statement and the press conference. The Japanese are painted into a corner as they offer 75 basis points interest, but quite frankly, their bond market is starting to get out of control, and a lot of that comes down to the debt.
The market has clearly spoken that it does not like the interest rates rising in Japan and therefore continues to punish Japan via its bond market. If the central bank starts to talk about quantitative easing again, that probably helps the bond market but crushes the yen.
Interest Rate Differential
The interest rate differential, even after the Fed cuts a total of 50 basis points this year as expected, is still wide enough to drive a truck through, and therefore, you get paid at the end of every day to hold this currency pair. I think that continues to be one of the main drivers.
The 50-day EMA is down at the 156.11 level, and I think it is going to continue to offer a bit of a floor in the market. I like buying dips. I’ve been hanging on to this one for a while, adding occasionally, and building up a sizeable position that pays me at the end of every day. That’s how I think this continues. 160 yen will be the next target.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
Natural gas price continued forming strong bullish waves since yesterday, to notice achieving the suggested targets by reaching $4.00 level, to reach the support of the broken bullish channel’s support, which represents a key resistance.
Noticing that stochastic begins to exit the oversold level, attempting to provide a new bullish momentum, to increase the chances of surpassing the current resistance, and its stability above this level will confirm its readiness to record new gains by its rally towards $4.185, while the failure to breach it will support the dominance of the sideways bias in the current trading, and there is a chance to retest $3.620 level before reaching extra bullish target.
The expected trading range for today is between $3.780 and $4.185
The interest rate differential is still wide enough to drive a truck through in this pair, and that’s the main focus longer-term. At this point, I look at pullbacks as an opportunity.
The British pound initially rallied against the Japanese yen during trading on Tuesday but has given back quite a bit of the gains. This does make a certain amount of sense because it has been more or less a risk-off type of environment. That to me doesn’t really matter, though, because I think that’s a temporary situation. The interest rate differential is still wide enough to drive a truck through, so I still prefer to own the British pound over the Japanese yen.
Furthermore, the bond market in Japan is all over the place, and I think that is a story that will continue to play out. While the interest rates in Japan have been climbing, it’s not for the right reasons, and therefore, I think the Japanese yen will continue to suffer.
Pullbacks and Support Levels
Pullbacks at this point in time will more likely than not look at the ¥210 level as a floor. After that, we have the 50-day EMA sitting just below the ¥209 level. To the upside, the ¥215 level could be your target, but we haven’t made it there yet. It looks like the area right around ¥214 continues to cause a little bit of a headache.
I think it makes a lot of sense to go sideways for a while and perhaps have more of a buy-on-the-dip type of behavior in this market. The Bank of England has a little bit of a negative, kind of dovish tone to it, but it’s not aggressively so, and therefore, the carry trade will be very much alive in this pair going forward for the foreseeable future.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
US President Donald Trump’s speech in Davos brought some near-term relief.
The US calendar will offer some first-tier, yet old data on Thursday.
XAU/USD retreated sharply from all-time highs as the mood improved.
Spot Gold neared $4,890 on Wednesday, clinching yet another record high, as investors continued to seek refuge amid escalating geopolitical tensions triggered by United States (US) President Donald Trump. Trump delivered a speech at the World Economic Forum (WEF) and covered multiple subjects, from the US economy to how the country leads the world across all fronts.
The US Dollar (USD), however, managed to recover some of the ground lost throughout the first half of the day early in the American session, as President Trump noted the US does not want to use excessive force to obtain Greenland. As a result, XAU/USD shed some $70 bucks from its top, and trades around the $4,820 mark.
Uncertainty, however, remains in the background as President Trump did not refrain from praising the positive effects of widespread tariffs on the US economy. It’s clearly a tool he is willing to continue using.
Thursday will bring first-tier US data, although the figures were delayed by the government shutdown the country suffered last October. The American calendar includes a revision of the Q3 Gross Domestic Product (GDP), with annualized growth expected to be confirmed at 4.3%.
The country will also release the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge. The data scheduled for release corresponds to October and November, a bit too old to be actually relevant.
Inflation is a key economic indicator in most cases, as it helps shape the central bank’s decisions. In this particular case, however, investors would rather wait for the announcement of Chair Jerome Powell’s replacement before changing bets on what the Fed would or would not do this year.
XAU/USD short-term technical outlook
The near-term picture for XAU/USD shows the pair is correcting overbought conditions, but also that the risk remains skewed to the upside. The 20-period Simple Moving Average (SMA) rises above the 100- and 200-period SMAs, keeping the bullish alignment alive. All three SMAs trend higher, and the price holds above them, sustaining an upward bias. The 20 SMA at $4,724.08 offers initial dynamic support, with the 100 SMA at $4,530.83 as a secondary floor. At the same time, the Momentum indicator remains well above its midline, although it is heading lower. The Relative Strength Index (RSI) indicator does the same, currently standing at 69.
In the daily chart, however, XAU/USD retains its bullish bias. The pair develops above all its moving averages, while the 20-day SMA climbs above the longer ones. Meanwhile, the RSI indicator retains its bullish slope around 76, while the Momentum indicator barely decelerated its advance well into overbought territory. The corrective decline may find buyers at around $4,800, a psychological support, with the speed of the subsequent recovery directly linked to the market’s sentiment.
(The technical analysis of this story was written with the help of an AI tool.)
The Pound to Dollar exchange rate (GBP/USD) has edged closer to 1.35 as renewed dollar weakness offsets a softer risk backdrop, with markets increasingly focused on US political risks rather than UK fundamentals.
GBP/USD Forecasts: Trump Agenda Dominates
The Pound to Dollar (GBP/USD) exchange rate held above 1.3400 in Asia on Tuesday and has advanced to highs just below 1.3500 amid dollar losses. Major GBP/USD resistance levels come in above 1.3550.
Risk conditions are likely to dominate and a key issue will be whether the dollar can gain defensive support or whether there is a renewed sell-off in the currency amid fears over the US outlook. If equities continue to slide, it will be tough for the Pound to make headway.
The key issues are likely to be intense uncertainty and higher volatility with a focus on rhetoric at the Davos gathering.
RBC Capital Markets has a year-end GBP/USD target of 1.36 and added; “while some cable downside risks can be priced out of 2026, new uncertainties may emerge.”
Geo-political developments have dominated with further concerns over the US threat of tariffs on eight European countries if there is no deal on Greenland.
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The dollar has been hurt by renewed talk of a sell America mentality, especially with the risk of retaliation from Europe. Overall risk appetite, however, has dipped again with sharp losses for equities.
Adding to the sense of unease has been a highly critical post from Trump calling the UK deal on the Chagos Islands as an act of great stupidity.
Markets are also still having to deal with uncertainty surrounding Federal Reserve independence.
According to MUFG; “The trade uncertainty, Fed independence threats, and Trump’s approach to geopolitics generally are all factors that could result in a sudden pick up in appetite for reducing US dollar exposures. The cost involved in that should also cheapen if we see the Fed deliver further rate cuts this year.”
ING notes that US assets are still performing well and added; “until the performance outlook for those assets significantly shifts, we are unlikely to see a significant exodus of European capital from the US.”
It added; “That said, we are a little negative on the dollar this year for macro reasons. But a 10% sell-off akin to last April’s ‘sell America’ theme looks unlikely.”
As far as data is concerned, the UK unemployment rate held at 5.1% in the three months to November, matching the 4-year high, and in line with consensus forecasts.
The ONS reported a 33,000 decline in payrolls for November with a provisional decline of 43,000 for December.
Headline average earnings growth slowed to 4.7% from 4.8% with underlying growth at 4.5% from 4.6% previously and in line with expectations.
There was no shift in Bank of England expectations with markets not expecting a February cut.
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Colder Forecasts and Short-Covering Drive the Rally
Traders are blaming the price surge on colder U.S. weather forecasts and short-covering as key factors behind the move. Attention now turns to Thursday’s U.S. government storage report and fresh demand figures due in late January.
Weekend Forecast Shift Triggers Aggressive Buying
After hitting a multi-month low last week, prices consolidated for a couple of days ahead of the weekend. However, a gap higher opening Sunday night set in motion the current price spike. The initial move was fueled by a shift in the 10-15 day forecast over the weekend. The sudden shift is driving traders to rapidly adjust heating demand forecasts, catching some bearish bets off guard.
Front-Month Squeeze Amplifies Price Action
The rally comes about a week before the near-month futures rollover from the February to March contract. The front or prompt month is crucial because that is where the physical squeeze hits first. When the front-month contract is set off by weather, prices jump because short-sellers, caught on the wrong side of the trade, will pay almost anything to get out of their positions or risk turning winning trades into losing ones. Typically, utilities and industrial buyers, who haven’t hedged their purchases, often face sharp price increases, and are forced to pay up.
Sharpest Gain Since January 2022
On Tuesday, for example, the jump in February futures was its sharpest gain since January 2022. Traders pointed toward short-covering as the main reason for the price spike after U.S. CFTC data revealed speculative short positions hitting their highest level since November 2024.
Demand Surge and Freeze-Off Risks Loom
Not only is total demand, including exports, set to rise next week with some models showing an increase of more than 200 billion cubic feet in implied demand since Friday, but with more cold weather approaching, Energy Intelligence is warning of potential freeze-off risks. This could produce supply disruptions, new price spikes and potential power outages.
Technical Outlook: Uptrend Confirmed with Key Breakouts
