• Silver price surges to near $34.50 as the US JOLTS Job Openings data for September has come in weaker-than-expected.
• The US Dollar surrenders its intraday gains as soft job vacancy data pointed to a slowdown in labor demand.
• Investors will focus on a slew of US economic data.

Silver price (XAG/USD) discovers strong buying interest in Tuesday’s North American session as the United States (US) Bureau of Labor Statistics (BLS) has reported weak set of JOLTS Job Openings data for September. The white metal extends its rally to near $34.50 as soft job opening numbers have pointed to a slowdown in the job market.

Weak US job openings data has weighed on the US Dollar (USD), which has given up its entire intraday gains. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls back to nearly 104.30 after refreshing an almost three-month high of around 104.60. 10-year US Treasury yields surrender some of its intraday gains but hold the key support of 4.20%.

This week, investors will pay close attention to the US Q3 Gross Domestic Product (GDP), Personal Consumption Expenditure Price Index (PCE) data for September, the Nonfarm Payrolls (NFP), and the ISM Manufacturing PMI data for October published this week.

The economic data will indicate how the Federal Reserve’s (Fed) monetary policy will shape the remainder of the year.

Meanwhile, the outlook of the Silver price will remain firm amid uncertainty over US presidential elections on November 5. Traders expect former US President Donald Trump to return to power, while national polls have shown fierce competition with current Vice President Kamala Harris. The risk profile has remained favorable for safe-haven assets as Trump is expected to implement protectionist policies, which will result in an inflationary environment and will have an adverse impact on the currencies of the US’s major trading partners.

Silver technical analysis

Silver price aims to recapture a fresh over 12-year high near $35.00 after a breakout of three-day consolidation. The horizontal support plotted from the May 21 high of $32.50, on a daily timeframe, will act as a key cushion for Silver price bulls from where it delivered a five-month consolidation breakout. Upward-sloping 20-day Exponential Moving Average (EMA) near $32.70 signals more upside ahead.

The 14-day Relative Strength Index (RSI) stays in the 60.00-80.00, pointing to an active bullish momentum.

Silver daily chart

• Silver price drifts higher to around $33.90 in Tuesday’s early European session, adding 0.71% on the day. 
• Growing fears of rising Middle East tensions, and uncertainties surrounding the US presidential election could support white metal. 
• Bets for smaller Fed rate cuts might cap the Silver’s upside. 

Silver price (XAG/USD) gains traction to near $33.90 during the early European session on Tuesday. The ongoing geopolitical tensions in the Middle East and the uncertainties surrounding the global economy and the US presidential election lift the white metal. 

Iran’s Supreme Leader Ali Khamenei has given a measured response to Israeli strikes on the country, stating that the attack should not be “exaggerated or downplayed” but refraining from pledging quick retaliation. According to the BBC, Iran’s President Masoud Pezeshkian said that the country will “respond appropriately” to an attack that killed at least four troops. 

Market players will monitor the development surrounding geopolitical risks in the region. Any signs of further escalation could boost the safe-haven flows, benefiting the silver price. 

Major central banks worldwide have largely begun easing monetary policy and cutting interest rates. Furthermore, the additional US Federal Reserve (Fed) rate cuts expected in the November meeting could support the non-yielding precious metal. 

However, bets for a less aggressive policy easing by the Fed could cap the upside for the Silver. Financial markets anticipate the US central bank to cut interest rates by 25 basis points (bps) in both the policy meetings in November and December.

Later this week, the advanced US Q3 Gross Domestic Product (GDP), the Personal Consumption Expenditures (PCE) Price Index for September and Nonfarm Payrolls (NFP) will be the highlights. These reports could offer some hints about the size and pace of US Fed rate reductions. 

• Brent Crude oil prices opened lower due to renewed ceasefire hopes after a limited Israeli retaliatory attack on Iran.
• The attack didn’t target energy infrastructure, leading to a drop in geopolitical risk premium.
• CitiGroup lowered its Brent price target for the next three months to $70 a barrel.

Most Read: Markets Weekly Outlook – ‘Magnificent 7’ Earnings, BoJ Meeting and US Jobs Data

Oil prices opened $4 lower or 5.84% on renewed ceasefire hopes after Israel launched a limited retaliatory attack on Iran over the weekend. The attack by Israel did not target any energy infrastructure but rather focused on military targets. The scope of the attacks have led to increased hopes of a potential ceasefire.

The attacks have seen the premium priced in from Geopolitical risk largely fall away. My question would be whether such a move is premature? There are some analysts who share my view that a ceasefire in the Middle East is unfortunately still far away.  

OPEC + continues to lower its forecasts as does the IEA with many hoping recent Chinese stimulus may help demand concerns. However, more importantly moving forward will be whether OPEC + proceeds with production increases as planned for the end of the year. Last week this seemed plausible as Oil prices appeared to be heading back toward $80 a barrel. The narrative has shifted after the weekend, at least from my point of view. If oil prices continue to languish in the low 70’s a barrel, i think OPEC + is unlikely to raise output in December.  

After the developments over the last week, CitiGroup has lowered their Brent price target for the next three months to around $70 a barrel, from a previous $74. This is a significant downgrade in my opinion and it will be interesting to monitor whether other analysts or investment banks/houses do the same.

The week ahead usually brings the most recent inventory data which will once again be monitored. There is a lot of risk this week that relates to markets as a whole with US Earnings and Jobs data ahead. 

Sentiment changes from these events could also have a knock on effect on Oil prices. 

For all market-moving economic releases and events, see the MarketPulse Economic Calendar.  

Technical Analysis

From a technical perspective, oil has had a $4 gap to the downside over the weekend which does mess with the price action outlook. Following Friday, the technicals were hinting at a bullish continuation move for oil prices which could still materialize but seems less certain now. 

Brent opened around the 72.35 mark having finished last week trading at 76.050 a barrel. As things stand, price is caught in a massive demand which would hint at a bounce. However, with the geopolitical premium out for now and Skepticism around global growth, could Oil prices decline further?

Immediate support rests at 71.50 before the psychological 70.00 mark comes into focus. Below this we have the YTD low just shy of the 69.00 to keep an eye on.

As much i would love a recovery and for Oil prices to close the gap, i am not sure if we have the right conditions for that at the minute. A move higher from here will have to negotiate the resistance area at 73.40 before 75.00 deserves attention. A break above 76.35 could lead to a speedy rally toward the 79.00 handle.

Brent Crude Oil Daily Chart, October 28, 2024

Source: TradingView (click to enlarge)

Support

Resistance

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• Gold price extends the previous rebound early Tuesday, retakes $2,750.   
• The US Dollar tracks US Treasury bond yields lower ahead of key US jobs data.
• Technically, Gold price remains within a range with upside risks intact.  

Gold price is building on the previous day’s rebound, eyeing a sustained move above $2,750 early Tuesday. Despite the renewed uptick, Gold price remain within a familiar range as the US Dollar (USD) rally takes a breather ahead of top-tier US economic data releases due later on Tuesday.

Can Gold price sustain the upswing ahead of US data?

USD buyers resort to profit-taking after the recent upsurge to three-month highs while repositioning in the run-up to the high-impact US statistics due this week. Later this Tuesday, the JOLTS Job Openings survey and the Conference Board Consumer Confidence data will be eyed to gauge the US economic resilience, which could provide fresh hints on the Federal Reserve’s (Fed) interest-rate cut outlook.

The Greenback traders also remain wary ahead of Thursday’s release of the Fed’s preferred inflation measure, the PCE Price Index, followed by the all-important US Nonfarm Payrolls (NFP) showdown. Additionally, traders’ nervousness before the publication of the third-quarter earnings reports of the US’ biggest companies by market capitalization, including Google’s parent company Alphabet, Meta Platforms, Amazon Inc., etc., also keeps the USD on the back foot.

Meanwhile, increased enthusiasm that former US President Donald Trump could win the November 5 election, combined with hopes of more Chinese stimulus, underpin global equities, diminishing the attractiveness of the go-to safe-haven, the US Dollar.

Against a broad US Dollar pullback, Gold price is trying its luck to make another headway toward the record high of $2,759, despite reports that physical Gold demand from China has taken a hit.

According to a state-backed gold association, cited by Reuters on Monday, “China’s gold consumption in the first three quarters of 2024 slid 11.18% from the same period a year ago to 741.732 metric tons as high prices dented buying interest for jewelry products.”

Further, the festive season in India – the world’s no.2 yellow metal market – also lends support to the bright metal.

However, it remains to be seen whether Gold price can sustain its uptick, as the US Dollar could jump back on the bids on the revival of the USD/JPY bullish momentum. At the press time, the Japanese Yen has recovered some ground on a dip in Japan’s Unemployment Rate, suggesting tight labor market conditions that are conducive for the Bank of Japan (BoJ) to mull further rate hikes. This has triggered a decent USD/JPY pullback below 153.00.

Gold price will also take cues from the upcoming US data and sentiment on Wall Street, as the US earnings calendar heats up.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price has entered a phase of consolidation, with the upside capped by the record high of $2,759 set on October 23 while buyers continue to find demand at $2,723, the 23.6% Fibonacci Retracement (Fibo) level of the latest record rally from the October 10 low of $2,604 to all-time high of $2,759.

The 14-day Relative Strength Index (RSI) is inching higher, approaching the overbought region, currently near 69.  The leading indicator indicates more room for Gold price upside in the near term.

Therefore, Gold buyers need a sustained move above the $2,750 psychological barrier to take on the lifetime high at $2,759. Further up, the $2,570 level will challenge the bearish commitments. 

On the downside, the 23.6% Fibo support at $2,723 remains a tough nut to crack for Gold sellers.  

Acceptance below that level on a daily candlestick closing basis could revive the correction, targeting the 38.2% Fibo level of the same ascent at $2,700.

Further south, the 50% Fibo support at $2,681 will be challenged, where the 21-day Simple Moving Average (SMA) aligns. 

Pullback From 20-Day MA

Today’s sharp bearish reversal triggered a decline below the inside day from Friday. Both last Friday and Thursday’s highs found resistance around the purple 20-Day MA, now at 2.57. That was the top of the counter-trend rally seen so far. There was concern discussed recently about potential resistance around the 20-Day line, and the bearish answer is now clear. However, how that plays out with the larger developing patterns remains to be seen.

Trades Within Weekly Range

The two key price levels to be aware of are last week’s high of 2.58 and low of 2.21. Until then, natural gas is consolidating within last week’s price range when considered on a weekly basis. Also, the market has clearly recognized the price zone represented by the 20-Day MA and therefore it may do so again. Although trendlines may not be too reliable on their own as a signal they can provide indications of improving or decreasing demand. So, the internal uptrend line can be watched in that regard. If there is a daily close below the line, the chance of a deeper pullback from there increases.

20-Day Line to Provide a Clue

A clear sign of strength will be given if the 20-Day line is recaptured. However, a daily close confirming the breakout will be needed to indicate that price is likely to continue to strengthen. Further, a rally above last week’s high is needed to provide a weekly bullish signal. Of course, that would also signal a breakout above the most recent swing high as seen on the daily chart and thereby trigger a continuation of the bull trend as it would signal a higher swing high.

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