• Gold price trades on a softer note near $2,430 in Monday’s early Asian session. 
• Safe-haven flows amid elevated geopolitical risks might support the yellow metal. 
• Traders await key US economic data this week for fresh catalysts, including PPI, CPI and Retail Sales.

Gold price (XAU/USD) trades on a negative note around $2,430 during the early Asian session on Monday. The modest recovery of the US Dollar (USD) drags the yellow metal lower on the day. However, the downside might be limited amid the heightened geopolitical tensions in the Middle East.  

Tensions in the Middle East would maintain the XAU/USD bid, with reports showing an intensification of the war. On Sunday, Defence Minister Yoav Gallant informed US Defence Secretary Lloyd Austin that Iran’s military preparations indicated the country is preparing for a large-scale strike on Israel, according to Axios writer Barak Ravid on X, citing a person familiar with the call. 

Heightened volatility and elevated geopolitical risks are likely to boost safe-haven flows, benefiting the precious metal. “In the medium term, the outlook for gold remains positive, with any dips likely to be short-lived due to underlying macroeconomic factors,” said Zain Vawda, market analyst at MarketPulse by OANDA. 

Investors are split on whether the US Federal Reserve (Fed) would be aggressive in its monetary policy by announcing a 50 basis point (bps) interest rate cut or a 25 bps cut. The key US economic data this week might offer some hints about economic conditions, with the release of the US Producer Price Index (PPI), Consumer Price Index (CPI) and Retail Sales. The stronger-than-expected data might delay or diminish the odds of deeper Fed rate cuts, which weigh on the Gold price.  

• In my daily Copper analysis, I recognize that this asset could be on the verge of breaking out to the upside.
• This is very important to pay attention to, due to the fact that the copper market is a good gauge of what the economy is doing.
• By paying attention to copper, you recognize what is going on with construction and at this point in time, the artificial intelligence world as so much copper is needed to propel that science forward.

There’s also a lot to be said about the copper market and its predictive qualities for Asian markets, as it is used in so much construction in places like China and Indonesia, which of course are the hotbeds of global growth that a lot of people put money into. Because of this, the market is one that a lot of people will pay attention to in order to assess what the Australian dollar is going, Australian stocks, as well as other hard assets that are in such high demand in places like mainland China.

Technical Analysis

The market recently pulled back to the 50% Fibonacci retracement level, but over the last couple of days has rallied a bit in order to break back above the 50-Day EMA. By doing so, the market looks as if it is ready to continue to go higher, and if we can break above the crucial $10,000 level in the spot market, I think you have a real shot at copper taking off in trying to get back to the previous highs, near the $11,150 level. Whether or not we can break above there remains to be seen, but that is a big enough mood that I think most people would be happy with taking advantage of it.

Keep in mind the Friday as the jobs number in the United States and that can have a major influence on risk appetite, at least in the short term. Pullbacks at this point should see the $9500 level has potential support, as it had been previously. If we break down below there, then we could go looking to the 61.8% Fibonacci retracement level, which is backed up by the crucial 200-Day EMA. All of that being said, I am more bullish than bearish at this point, and I do think copper could be a great trade if you are paying attention to it.

Ready to trade our Forex daily forecast? We’ve shortlisted the best forex broker list for beginners for you to check out. 

• Gold price trades on a weaker note near $2,435 in Monday’s early Asian session, down 0.40% on the day. 
• US Nonfarm Payrolls rose by 114K in July vs. 179K prior, weaker than expected. 
• The Middle East tensions might cap the gold’s downside. 

Gold price (XAU/USD) edges lower to $2,435 on Monday during the early Asian session. However, the downside might be capped due to rising expectations of rate cuts by the US Federal Reserve (Fed) and the risk-off mood amid ongoing geopolitical tensions in the Middle East. 

The disappointing US July employment data raised fears of a recession and triggered the possibility of Fed rate cuts in September. “The marketplace just now is factoring in a better-than-70% chance for a 50-basis-point cut by the Fed at the September FOMC meeting,” said Jim Wyckoff, senior market analyst at Kitco Metals. 
 
The US Bureau of Labor Statistics (BLS) showed on Friday that US Nonfarm Payrolls (NFP) rose by 114K in July from the previous month of 179K (revised down from 206K), weaker than the expectation of 175K. Meanwhile, the US Unemployment Rate rose to the highest level since November 2021, coming in at 4.3% in July from 4.1% in June. 

Investors will take more cues from the US ISM Services Purchasing Managers Index (PMI) on Monday, which is expected to improve to 51.0 in July from 48.8 in June, In the case of the stronger-than-expected data, this might lift the US Dollar (USD) and cap the upside for USD-denominated Gold. 

On the other hand, the escalating geopolitical tensions in the Middle East might boost the safe-haven flows, benefiting the yellow metal. The BBC reported that several nations have urged their citizens to leave Lebanon as worries mount about a wider Middle Eastern war. Additionally, the US general in charge of American troops in the Middle East arrived on Saturday as preparations continued for a potential strike against Israel by Iran in retaliation for the killing of senior Hamas and Hezbollah leaders, according to two US sources.

• The West Texas Intermediate Crude Oil Market initially pulled back just a bit during the early hours on Thursday, only to turn around and show signs of life.
• By rallying the way it has, it tells me that the market is still going to pay attention to the symmetrical triangle that we had been trading in for some time.
• We need to pay close attention to the $73.50 level as it is supported.

A break higher at this point in time opens up the possibility of a move to the 50-day EMA, which is a major indicator that a lot of people pay close attention to. Furthermore, there’s also a gap on the chart in this area, and therefore it’s likely that we will continue to see every dip continue to attract significant attraction.

On a Turnaround

If we were to turn around and break down below the $71.50 level, then the market could drop down to the $67.50 level, which is also massive support. I think at this point in time, we are very cautious with our optimism in the short term, but I do think it looks like we are trying to squeeze to the upside. Keep in mind, there are a lot of geopolitical factors out there that continue to favor the idea of oil being something that is going to be bullish because of territorial disputes and conflicts.

You also have this time of year, which is typically bullish anyway. So as long as that’s going to be the case, I find it very difficult to short oil anytime soon. That being said, I also recognize that the area right around the $83.50 level is significant resistance, so I don’t think we get above there either. Essentially, we are in some type of summertime range that is squeezing tighter and tighter and will eventually have to be resolved.

Ready to trade the Crude Oil forecast? Here’s a list of some of the best Oil trading platforms to check out. 

• Silver price clings to gains above $27.00 as Fed rate cuts in September seems imminent.
• Investors divided over size of Fed’s interest-rate cuts in September.
• Fears of global slowdown have been diminished by lower US jobless claims and China’s hot inflation data.

Silver price (XAG/USD) holds onto gains above the crucial support of $27.00 in Friday’s New York session. The white metal clings to gains as a move towards policy-normalization from the Federal Reserve (Fed) seems certain in September. However, investors divide over the size of interest-rate cuts.

According to the CME FedWatch tool, 30-day Federal Funds Futures pricing data shows that traders see a 56.5% chance that interest rates will be reduced by 50 basis points (bps) in September. The likelihood of 50 bps rate cuts has dropped in a week as fears of global slowdown have diminished after lower-than-expected United States (US) Initial Jobless Claims and hot China’s Consumer Price Index (CPI) data for July.

The US Dollar (USD) exhibits a subdued performance as Fed rate cuts in September seems certain. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, corrects to near 103.15 from four-day high of 103.50. 10-year US Treasury yields slump to near 3.93%.

Historically, lower yields on interest-bearing assets bodes well for the Silver price. But in this case the Silver price is slightly down as investors worry about its global demand as a metal, with application in various industries.

Silver technical forecast

Silver price declines toward the horizontal support plotted from 4 December 2023 high of $25.90 on a daily timeframe. The asset hovers near the 200-day Exponential Moving Average (EMA) around $26.90, suggesting that the overall trend is uncertain.

The 14-day Relative Strength Index (RSI) attempts to return inside the 40.00-60.00 range. A bearish momentum would conclude if the RSI (14) manages to do so.

Silver daily chart

Bullish Signs Following Descending Wedge Breakout

A decisive bullish breakout triggered on Wednesday as natural gas broke out of a bullish descending wedge pattern. Following the breakout upward momentum stayed strong. Each of the past three days closed in the top quarter of the day’s trading range. The 2.15 daily swing high is also a weekly high from last week. This means a weekly bullish signal was also triggered this week. So, a daily close above 2.15 will also confirm the weekly reversal. It follows seven weeks down from the most recent swing high at 3.16.

Further Rest Possible Before Trend Continues

There could be a pullback before natural gas progresses higher and, in that case, the first price level to watch is the 20-Day MA at 2.09. It was successfully tested as support with today’s low of 2.10. Lower down is the 50% retracement level at 2.04, followed by a price zone around the 2.03 to 2.01 daily lows from Thursday and Wednesday, respectively. That would also be roughly around the top boundary line of the wedge pattern.

Watching for Short Term Weakness

The degree of retracement, if it comes before a bullish continuation, may tell us something about the underlying strength in demand for natural gas. Of course, finding support at or above the 20-Day line and then continuing higher would be the more bullish behavior. Nevertheless, the weekly reversal was just triggered, and it indicates there will likely be a continuation to the rally. What is not clear is the aggressiveness of the rally. A prolonged retracement or consolidation prior to a bullish continuation is possible. But, given the clear bullish breakout this week it is also possible that the bulls maintain control into higher price levels.

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

• Silver struggles to capitalize on a modest intraday uptick to the 23.6% Fibo. level.
• The technical setup favours bears and supports prospects for additional losses.
• Any meaningful rise could face difficulty in moving back above the 100-day SMA. 

Silver (XAG/USD) struggles to capitalize on the previous day’s goodish rebound from the $26.45 area, or the lowest level since early May and seesaws between tepid gains/minor losses through the early European session on Friday. The white metal now seems to have stabilized around the $27.50-$27.55 region and remains below the 23.6% Fibonacci retracement level of the July-August downfall.

The said barrier is pegged near the $27.75 region, which if cleared might trigger a short-covering rally and lift the XAG/USD to the $28.00 mark. The recovery momentum could extend further towards the 38.2% Fibo. level around the $28.50-$28.55 region, though is more likely to remain capped near the 100-day Simple Moving Average (SMA) breakpoint, near the $28.75-$28.80 area. However, some follow-through buying, leading to a subsequent strength beyond the $29.00 mark, might negate any near-term negative bias and pave the way for additional gains. 

The XAG/USD might then climb to the $29.45 intermediate hurdle en route to the 61.8% Fibo. level, around the $29.75 region and eventually aim to reclaim the $30.00 psychological mark. That said, technical indicators on the daily chart – though have recovered from lower levels – are still holding deep in negative territory. This, in turn, warrants some caution for bullish traders and positioning for a further intraday appreciating move.

Meanwhile, any meaningful slide now seems to find some support near the $27.30-$27.25 area ahead of the $27.00 mark. A convincing break below has the potential to drag the XAG/USD back towards the $26.50-$26.45 area, or a multi-month low set on Wednesday. The latter should act as a key pivotal point, which if broken will be seen as a fresh trigger for bearish traders and make the white metal vulnerable to test the May monthly swing low, around the $26.00 mark. The commodity could drop further to the $25.60 horizontal support and the $25.00 psychological mark.

Silver daily chart

• Gold price looks to build on the previous rebound early Friday, eyes weekly gains.
• Risk flows return, and the US Treasury bond yields pullback, weighing on the US dollar.
• Unexpectedly upbeat US Jobless Claims data alleviate recessionary fears.
• Gold price averts a symmetrical triangle breakdown and regain 21-day SMA, as the daily RSI turns bullish.    

Gold price is consolidating at the weekly high near $2,410, gathering pace to extend the previous rebound. Gold price remains on track to settle the week in the green, staging a sold recovery from the recent correction from two-week highs.

Gold price awaits fresh catalysts for the next push higher

Markets saw an impressive upswing in Gold price on Thursday even as the US Dollar (USD) rebounded firmly in tandem with the Wall Street indices, following the release of the surprisingly strong US weekly Jobless Claims data.  

Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended August 3, the Labor Department said on Thursday, August 8, the largest drop in about 11 months, suggesting the gradual softening in the labor market remains intact while calming markets nerves over a potential US recession.

The uptick in the Gold price could be attributed to restoring investors’ faith across the financial markets after Monday’s turmoil prompted traders to lock in gains in their Gold longs to cover losses elsewhere. 

Meanwhile, conciliatory comments from Richmond Fed President Thomas Barkin and Chicago Fed President Austan Goolsbee also added to the market optimism. However, dovish remarks from Kansas City Fed Chief Jeffrey Schmid spoilt the US Dollar’s party, as the US Treasury bond yields pulled back sharply from the weekly top.

Further, the risk-on market environment also dulled the Greenback’s appeal as a safe-haven asset, helping Gold price settle at the highest level seen so far this week at $2,428.

Additionally, Gold price witnessed chart-based buying after buyers managed to defend a critical support area on the daily timeframe.

In Friday’s trading so far, the buoyant tone in the Asian stock markets keeps the US Dollar on the back foot but Gold buyers seem to have turned cautious heading into the weekly close. The end-of-the-week flows will likely remain in play while traders could also reposition themselves before next week’s crucial US Consumer Price Index (CPI) data.  

The absence of any top-tier US economic data on Friday, put the focus back on risk trends and Middle East geopolitical tensions, as Iran considers to pull back in exchange for progress on Gaza peace talks.

 This comes after US President Joe Biden and the leaders of Egypt and Qatar said Thursday that they were prepared to present a “final” cease-fire proposal to end the war in Gaza and called on Israel and Hamas to return to the negotiating table next week to settle the conflict.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price remains within a symmetrical triangle formation, having failed to seek a downside break after defending the key rising trendline support at $2,380.

The key leading indicator, the 14-day Relative Strength Index (RSI), has returned to positive territory, currently near 55.00, suggesting that upside risks remain in place for an extended Gold price rebound.

Adding credence to the bullish potential, Gold buyers recaptured the 21-day Simple Moving Average (SMA) support-turned-resistance at $2,415 on a daily closing basis.

The immediate upside barrier is seen at the August 5 high of $2,459, above which the falling trendline resistance at $2,470 and the two-week high of $2,478 will be challenged.

Conversely, should Gold sellers fight back control, the immediate support is aligned the 21-day SMA at $2,415.

If the downside sustains, the abovementioned rising trendline support at $2,380 will come into play once again.

Thereafter, the 50-day SMA at $2,371 could come to the immediate rescue of Gold buyers.

• Silver trades at $27.49, rising over 3.50% after reclaiming the $27.00 level.
• Path of least resistance remains bearish; below $27.00 targets $26.45 and $26.11 support levels.
• Above $27.56, resistance levels are $28.00 and the August 5 high at $28.67.

Silver price surged on Thursday and gained over 3.50% as traders reclaimed the $27.00 figure although strong US data, bolstered the Greenback. Despite that, the XAG/USD bounced off weekly lows of $26.45 and hit a new weekly high before stabilizing at the current spot price. Silver trades at $27.49 as Friday’s Asian session begins

XAG/USD Price Forecast: Technical outlook

Silver prices climbed above $27.00 yet remain below the 100- and 50-day moving averages (DMAs) at $28.76 and $29.79, hinting that sellers are in control. The Relative Strength Index (RSI), which remains bearish, further confirms this.

Hence, the path of least resistance is tilted to the downside. if XAG/USD drops below $27.00, the next support would be the weekly low of $26.45. On further losses, the 200-DMA at $26.11 emerges as the next support, followed by the psychological $26.00 figure.  

Conversely, if XAG/USD buyers reclaim $27.56, the next resistance would be the $28.00 mark ahead of the August 5 high at $28.67.

XAG/USD Price Action – Daily Chart

Bullish Wedge Breakout Targets 2.27

The target from the descending wedge is the beginning of the pattern at 2.27. It is well on its way there now after breaching the 2.15 interim swing high today. Further, a breakout of the 20-Day MA triggered again today with prices continuing to rise from there.

Given the bullish momentum since Tuesday’s daily reversal and hammer candlestick breakout it looks like the retracement may have found a bottom. It will be clearer if natural gas can get above 2.27 and stay above that level. However, today’s advance also triggered a bullish reversal on the weekly chart with a move above last week’s high of 2.15. A daily close above that level will further confirm strength of the reversal.

200-Day MA Higher Target at 2.36

If the 2.27 swing high can be exceeded the next target is up around the 200-Day MA, currently at 2.36. Very close by is the 38.2% Fibonacci retracement at 2.37. Higher up is a target zone that begins around the 50-Day MA, which is currently at 2.45. The previous interim swing low from late-May is then at 2.47, followed by the 50% retracement at 2.52. Last week’s low may have been the low price for natural gas before it attempts to break out above the top downtrend line. The prior dotted trendline remains a little lower for reference.

Higher ABCD Pattern Target is 3.46 (long-term)

Since a bottom has likely been established a rising ABCD pattern can be drawn to help identify higher price targets. The first target from the pattern is at 3.46. That is a pivot level where the price appreciation seen in the AB leg up matches the CD leg up. Once price symmetry is established the potential for a change increases. Also, a breakout through the pivot is a sign of continued strength.

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