• Silver prices have appreciated following Ukraine’s launch of British Storm Shadow cruise missiles into Russia.
• Moscow has warned that using Western weapons to strike Russian territory far from the border would significantly escalate the conflict.
• Silver prices could face challenges due to a bleak outlook for the metal’s industrial use.

Silver price (XAG/USD) retraces its recent losses from the previous session, trading around $31.00 during the Asian hours on Thursday. The rise in precious metal prices is attributed to safe-haven flows amid escalating tensions in the Russia-Ukraine war.

On Wednesday, Ukraine launched a volley of British Storm Shadow cruise missiles into Russia, marking the latest deployment of Western weaponry against Russian targets. This follows Ukraine’s use of US ATACMS missiles the previous day.

According to a Reuters report, video footage posted by Russian war correspondents on Telegram showed black smoke rising in a residential area of the Kursk region, which borders northeastern Ukraine.

At least 14 large explosions were heard, most preceded by the sharp whistle of what sounded like incoming missiles. Moscow has stated that the use of Western weapons to strike Russian territory far from the border would significantly escalate the conflict.

However, Silver prices have been under pressure due to a bleak outlook for the metal’s industrial use. On Wednesday, the People’s Bank of China (PBoC) Monetary Policy Committee (MPC) decided to keep the benchmark interest rate at 3.1% for November. Higher interest rates in China, a major global manufacturing hub for electronics, solar panels, and automotive components, are expected to dampen industrial demand for Silver.

Furthermore, market expectations indicate that the incoming Donald Trump administration will spur inflation, which could slow down the Federal Reserve’s rate cut trajectory, thus exerting downward pressure on non-interest-bearing assets like Silver.

• Gold price sits at eight-day highs above $2,650 early Thursday, eyeing a weekly rebound.
• Geopolitical risks continue to support the traditional safe-haven Gold price ahead of Fedspeak.
• Gold price must scale 50-day SMA resistance at $2,660 as daily RSI peeps into the bullish zone.    

Gold price is sitting at the highest level in over a week above the $2,650 barrier in the Asian trading hours on Thursday. All eyes remain on the speeches from several US Federal Reserve (Fed) policymakers and Russia and Ukraine geopolitical updates, in the absence of top-tier US economic data releases.   

Gold price buyers appear unstoppable

Gold price extends its recovery mode into a fourth straight session early Thursday, helped by a modest pullback in the US Dollar (USD) and the US Treasury bond yields.

The USD rallied hard on Wednesday, tracking the sharp gains in the US bond yields as traders reinforced the Trump trades optimism, digesting hawkish Fed commentary and poor 20-year bond auction results.

Most of the Fed officials who spoke on Wednesday sound a bit hawkish, prompting markets scale back their expectations of a 25 basis points (bps) interest rate cut in December.

Fed Governor Michelle Bowman said that “the US central bank should pursue a cautious approach on monetary policy.” She was the most hawkish of the lot. Fed Governor Lisa Cook noted that timing of further interest-rate cuts will depend on coming data, leaving the central bank’s decision at its December meeting uncertain.

However, Kansas Fed President Jeffrey Schmid said that “now is the time to dial back restrictiveness of policy. I see full employment, inflation trending lower and solid growth.” Boston Fed President Susan Collins also sounded dovish, saying that “some additional rate cuts are needed as the policy is still restrictive.”

Markets are now pricing in a 52% chance of 25 bps Dec Fed rate cut, the CME Group’s FedWatch Tool shows, down from about 83% seen a week ago.

Despite the hawkish shift in the Fed expectations and Trump trades optimism, Gold price stood tall and benefited from intensifying geopolitical tensions between Russia and Ukraine.

Russia, on Wednesday, staged “a massive information-psychological attack” against Ukraine by spreading a fake warning, purportedly from Ukrainian military intelligence, about an imminent mass air attack.

This response came in after Russia’s Defence Ministry confirmed Tuesday that Ukraine fired six US-made Army Tactical Missile Systems (ATACMS) missiles at Bryansk region, just days after US President Joe Biden allowed the Ukrainian use of American-made weapons to strike inside Russia. The Kremlin also threatened a nuclear response to Ukranian’s non-nuclear attacks.

Amidst rife Russia-Ukraine conflict, Gold price is likely to stay supported but the upcoming Fed commentaries could reinforce sellers. Additionally, if risk-aversion hits the roof in the sessions ahead, the USD could regain traction on a flight to safety, capping the Gold price upside.

Traders remain nervous after the American AI giant Nvidia Corp.’s lackluster revenue forecast. Nvidia’s revenue rose 94% to $35.1 billion in the fiscal third quarter with the data centre unit, the biggest division, seeing its revenue double from a year earlier to $30.8 billion.

Gold price technical analysis: Daily chart

The short-term technical outlook for Gold price appears to lean in favor of buyers as the 14-day Relative Strength Index (RSI) prods the 50 level to the upside. The indicator is currently just above 50.

However, an impending Bear Cross could be a headwind for Gold price. The 21-day Simple Moving Average (SMA) is closing in to cut the 50-day SMA from above. If that happens on a daily closing basis, it will validate the bearish crossover.

Gold buyers need a daily candlestick closing above the 50-day SMA at $2,660 to unleash additional recovery toward the 21-day SMA at $2,680.

The $2,700 threshold will be the next significant target for buyers.

Conversely, failure to find acceptance above the 50-day SMA at $2,660 on a daily closing basis could reinforce sellers toward the $2,600 threshold.

Tuesday’s low of $2,610 will be tested ahead of that.

• Silver retreats over 1.14% as traders shift focus to the Greenback, though remains up 1.90% for the week.
• Technicals indicate a bearish trend with potential support at $30.00 after breaking below the 100-day SMA.
• RSI trends suggest bearish momentum is increasing, indicating possible further declines in silver prices.

Silver’s price retreats over 1.14% on Wednesday, yet it remains up 1.90% in the week as traders ditch the grey metal in favor of the Greenback. At the time of writing, XAG/USD trades at $30.82 a troy ounce, beneath the $31.00 psychological mark.

XAG/USD Price Forecast: Technical outlook

The non-yielding metal trades within the $30.38-$31.75 range, guarded by the 100- and 50-day Simple Moving Averages (SMAs), respectively. Despite being range-bound, the XAG/USD is downward biased in the short term as the precious metal achieves successive series of lower highs and lower lows.

Once sellers push XAG/USD below the 100-day SMA, a bearish resumption will occur. If cleared, the next support would be $30.00 a troy ounce, followed by the November 14 swing low of $29.68 and the 200-day SMA at $28.88.

If buyers moved in and pushed XAG/USD above $31.00, the 50-day SMA would be next, ahead of the $32.00 figure.

Indicators such as the Relative Strength Index (RSI) hint that bears continue to gather steam. Therefore, further XAG/USD downside is expected.

XAG/USD Price Chart – Daily

Strong Breakout of Symmetrical Triangle

Today’s strong rally triggered a breakout of a large symmetrical triangle pattern, and it will be confirmed on a daily close above 3.02. Also, the continuation of two rising ABCD patterns, one light blue and the other in purple, occurred on the advance above 3.02. And there was a third ABCD pattern (orange) that triggered a continuation of the pattern on the move above 3.16. The three patterns are a good example of the fractal nature of price patterns.

First Target (minor) Hit

A first target at 3.22 was reached today and tested as resistance. So far, there is enough resistance to stop the advance, if natural gas ends today with that high price. That price target is the initial projection from the near-term light blue rising ABCD pattern. Since it is the smallest structure of the three ABCD patterns, it had the greatest chance of being reached.

Since the triangle pattern is a long-term pattern that has been forming for some months, the bullish reaction from the breakout may overrule potential resistance at the first target for the smaller pattern. Bullish momentum seen today could continue to the next higher potential resistance from around 3.35 to 3.45. That price zone is found at the confluence of four projected price levels.

Monthly Breakout Confirms Strength

The 3.02 swing high was also the monthly high from October. Therefore, a monthly trend continuation signal occurred today. The dominant trend is seen in the monthly pattern as it can influence price patterns in the shorter time frames.

For a look at all of today’s economic events, check out our economic calendar.

• Silver price slides below $31.00 as its safe-haven demand fades.
• Higher bond yields also weighed on the Silver price.
• Investors expect the Fed to deliver fewer interest rate cuts in the current policy-easing cycle.

Silver price (XAG/USD) extends its correction below $31.00 in European trading hours on Wednesday after facing selling pressure near $31.50 on Tuesday. The white metal falls back as fresh escalation in the Russia-Ukraine war inspired by President Vladimir Putin’s approval to lowering the threshold for counter attack by nuclear weapons faded after Russian Foreign Minister Sergei Lavrov said the country will “do everything possible” to avoid the onset of nuclear war.

Putin cleared revision in the nuclear doctrine after US President Joe Biden provided the Army Tactical Missile System (ATACMS) to Ukraine and permitted them to launch deep into Russian territory. Historically, demand for safe-haven assets such as Silver, strengthens in times of uncertainty and heightened geopolitical risks.

A sharp recovery in the US Treasury yields has also weighed on the Silver price. 10-year US Treasury yields jump to near 4.42% on expectations of fewer interest rate cuts from the Federal Reserve (Fed) in its current policy-easing cycle. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Silver. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, bounces back strongly above 106.60.

Market participants expect the economic agenda of President-elected Donald Trump will boost the United States (US) inflation and economic growth, a scenario that will force the Fed to follow a gradual rate-cut approach.

Silver technical analysis

Silver price stays on track toward the upward-sloping trendline around $29.00, plotted from the February low of $22.30, which also coincides with the 200-day Exponential Moving Average (EMA). The white metal falls back after facing selling pressure near the 50-day EMA, which trades around $31.40.

The asset weakened after the breakdown of the horizontal support plotted from the May 21 high of $32.50.

The 14-day Relative Strength Index (RSI) slides to near 40.00. A bearish momentum will trigger if the RSI (14) sustains below the same.

Silver daily chart

• Gold prices extended their uptrend despite alleviating geopolitical jitters.
• The US Dollar regained composure and advanced to weekly tops.
• XAU/USD maintains the bullish note well north of $2,600/oz.

On Wednesday, Gold prices continued their ascent despite geopolitical tensions mitigated somewhat along with the appetite for safe-haven assets. Heightened anxiety over the Russia-Ukraine conflict, coupled with broader uncertainty in global markets, has been underpinning the strong weekly rebound in the precious metal for the time being.

The yellow metal, however, is expected to remain under scrutiny in the next few weeks as recent US economic data, coupled with expectations that Republican policies could fuel inflation, have increased the likelihood of interest rates staying elevated for an extended period. While gold is traditionally viewed as a hedge against inflation, higher interest rates make the non-yielding metal less attractive to investors.

So far this week, Gold prices surged past the recently breached $2,600 mark per troy ounce, finding decent resistance around the 55-day Simple Moving Average (SMA) above $2,640, which emerges as a noticeable hurdle as it seeks to build on its recovery momentum.

The yellow metal’s rebound was also supported by a softer US Dollar (USD), which has struggled to maintain the strength it gained during its Trump-trade rally. Adding to the bullish narrative, US Treasury yields have lost steam across multiple maturities, providing further breathing room for Gold prices.

Looking ahead, this week’s spotlight will turn to a series of key global economic data releases, with preliminary Purchasing Managers’ Indexes (PMIs) taking the lead. Market participants will also be tuning in to comments from central bank officials, particularly in the wake of Fed Chair Jerome Powell’s recent cautious stance. On this, let’s recall that Powell highlighted the resilience of the US economy but reiterated the need for prudence when considering future rate cuts.

From a positioning standpoint, speculative interest in gold has softened. Non-commercial traders reduced their net long positions to approximately 236.5K contracts as of November 12—the lowest level since early June, according to the latest CFTC report. This decline in long positions coincides with a second straight drop in open interest, which could prop up some loss of traction from the recent downtrend in gold prices.

XAU/USD short-term technical outlook

The daily chart of XAU/USD indicates a clear break above the bullish 100-day Simple Moving Average (SMA) above $2,550, which is close to the November low of $2,536. Further up comes the current weekly high of $2,650 (November 20) corresponds with the transitory 55-day SMA, confirming this first resistance zone. Up from here, the next minor objective is the $2,700 barrier, prior to the weekly top of $2,749 (November 5).

On the other side, a rapid breach of the temporary 100-day SMA at $2,554 should draw attention to the November low of $2,536 (November 14).

In the short term, the 4-hour chart indicates that the current recovery has more space to go. The Relative Strength Index (RSI) has recovered but confronts resistance at 65, while the Average Directional Index (ADX) near 34 suggests a lack of significant trend momentum for the time being.

On the upside, the next resistance level to monitor is $2,650, followed by the more important 200-SMA at $2,677. On the downside, support remains solid around $2,536, a critical level to monitor if prices reverse course.