• Silver price jumps to near $28 on multiple tailwinds.
• Market speculation for Fed big rate cuts in September has waned significantly.
• Investors await the US CPI for July for fresh guidance on interest rates.

Silver price (XAG/USD) surges to near $28.00 in Monday’s North American session. The white metal gains amid geopolitical risks and firm speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.

Conflicts between Iran and Israel in the Middle East are expected to widen further as the former is expected to retaliate for the assassination of the Hamas leader by an Israeli air strike in Tehran. The appeal of Silver as a safe haven improves amid geopolitical uncertainty.

Meanwhile, market speculation for the Fed rate cuts in September remain robust but uncertainty over the size has deepened significantly. According to the CME FedWatch tool, 30-day Federal Funds Futures pricing data shows that traders see a 46.5% chance that interest rates will be reduced by 50 basis points (bps) in September. The likelihood of a 50 bp rate reduction has weakened significantly from 85%, recorded a week ago.

A sharp decline in the Fed’s big interest-rate cut prospects has offered some support to the US Dollar (USD) and bond yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, steadies above 103.00. 10-year US Treasury yields hover near 3.95%.

Going forward, investors will focus on the United States (US) Consumer Price Index (CPI) data for July, which will be published Wednesday. Headline and core CPI, which strips off volatile food and energy prices, are expected to have decelerated to 2.9% and 3.2%, respectively.

Silver technical analysis

Silver price rises to near the upward boundary of the Falling Channel formation in a four-hour timeframe. Usually, investors see pullbacks in the above-mentioned chart pattern as selling opportunities by market participants. The asset remains below the 200-period Exponential Moving Average (EMA) near $28.76, suggesting that the overall outlook is bullish.

The 14-period Relative Strength Index (RSI) attempts to break above 60.00. Sustenance above the same would improve Silver’s appeal.

Silver four-hour chart

• Gold price pulls back from six-day highs, as traders lock in gains ahead of key US inflation data.
• The US Dollar stalls decline amid pre-US CPI anxiety and looming Mid-East geopolitical risks.
• ‘Buy-the-dips’ in Gold price while 21-day SMA holds and daily RSI stays bullish on the daily chart.    

Gold price is retreating from near a one-week high of $2,473 set on Monday, as traders lock in gains ahead of the key US inflation reports. The US Producer Price Index (PPI) data will hog attention later on Tuesday while the US Consumer Price Index (CPI) inflation release will stand out on Wednesday.  

Iran-Israel escalation and US inflation data on tap

Markets eagerly await the high-impact inflation data from the US to gauge whether a big interest-rate hike by the US Federal Reserve (Fed) is in the offing, especially following the weak jobs report, which triggered recessionary fears and ramped up aggressive Fed rate cut bets.

Markets are now pricing in about 50% chance of a 50 bps rate cut in September by the Fed, according to the CME Group’s FedWatch Tool. Meanwhile, the headline annual CPI is set to rise 2.9% in July afte increasing by 3.0% in June. Meanwhile, the core inflation is expected to edge a tad lower to 3.2% YoY in July versus June’s 3.3% print.

That said, the US headline annual PPI is seen rising 2.3% in July after reporting a 2.6% growth in June. The core PPI inflation is set to decline from 3.0% YoY in June to 2.7% in July. The likely progress in disinflation will pave the way for a notable easing by the Fed, which could bode well for the non-interest-bearing Gold price.

Amidst increased dovish Fed expecttions, the US Treasury bond yields remain on the losing end, also hit by the rife Middle East tensions, which drive risk-off flows into the safe-haven assets such as the US government bonds and Gold price.

The traditonal safety bet, Gold price, jumped over 1% on risk aversion, courtesy of the from heightened tensions in the Middle East. White House spokesman John Kirby said late Monday that Iran could launch ‘significant’ attack on Israel this week and that the timing could affect Gaza ceasefire talks, currently scheduled to resume on August 15.

“Israel’s military and Lebanon’s Hezbollah militant group have traded strikes since the current war in Gaza began, but tensions have escalated since an Israeli strike in a Beirut suburb killed a top Hezbollah commander last month. Hezbollah has vowed to retaliate,”per CNBC News.

On Sunday, Axios reported that the Israeli intelligence community is put on a high alert, as it is believed that Iran has decided to attack Israel directly and may do so within days.

Looking ahead, geopolitical developments between Israel and Iran-backed militant groups – Hamas and Hezbollah will continue to lead sentiment and impact the value of Gold price. US inflation data and speeches from Fed policymakers will be also closely followed.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price accelerated its recovery mode and tested the upper boundary of a symmetrical triangle formation, then pegged at $2,473.

Hwever, Gold buyers fail to secure a daily candlestick closnig above that level triggernig a fresh pullback from near a weekly high.

The key leading indicator, the 14-day Relative Strength Index (RSI) has turned south but stays above the 50 level, suggesting that any pullback in Gold price is likely to be bought into so long as the  21-day Simple Moving Average (SMA) at $2,421 holds.

However, if the pullback extends, the 21-day SMA could give way to unleash further downside, with the immediate support then seen at $2,380, where the lower boundary of the triangle and the 50-day SMA converge.

Ahead of that demand area, the $2,400 threshold could rescue buyers.

Alternatively, acceptance above the aforesaid triangle resistance, now at $2,475, is critical to taking on the record high of $2,484, above which a test of the $2,500 mark will be inevitable.

• Silver price edges lower as traders ease back on a deeper rate cut by the Fed in September.
• CME’s FedWatch Tool suggests odds of a 50 basis points cut by the Fed in September have dropped to 50%.
• Israeli forces continued their operations near the southern Gaza city of Khan Younis on Monday.

Silver price (XAG/USD) retraces its recent gains from the previous session, trading around $27.70 during the Asian session on Tuesday. This downside could be attributed to diminished expectations for a 50-basis point interest rate cut by the US Federal Reserve in September.

US Federal Reserve (Fed) in September. According to CME’s FedWatch Tool, the probability of 50 basis points (bps) cut in September has dropped to 50%, down from 85% last week. However, the rate markets continue to price in a 100% chance of at least a 25 bps cut at the upcoming meeting.

Traders are likely to focus on US producer inflation data due on Tuesday and consumer inflation figures on Wednesday, looking for confirmation that price growth remains stable in the United States (US).

The downside of safe-haven metals like Silver could be restrained due to rising geopolitical tensions in the Middle East. Israeli forces pressed on with their operations near the southern Gaza city of Khan Younis on Monday. CBC News cited Palestinian medics saying Israeli military strikes on Khan Younis on Monday killed at least 18 people.

On Monday, Israel Defense Forces (IDF) intercepted around 30 “projectiles” crossing from Lebanon into northern Israel early Monday. The IDF stated that some projectiles landed in open areas, and no injuries were reported, as reported by ABC News.

XAU/USD Current price: $2,464.29

• Speculation that the Fed has no choice but to trim interest rates weighs on the US Dollar.
• The United States will publish the July Consumer Price Index later this week.
• XAU/USD is poised to extend gains despite near-term overbought conditions.

Spot Gold kept rallying on Monday, up for a third consecutive day and currently trading above $2,460 a troy ounce. The bright metal kicked off the week with a positive tone amid easing demand for the US Dollar. Meanwhile, concerns about escalating tensions in the Middle East fueled demand for Gold. Western countries issued a warning about a potential attack from Iran on Israel that would dilute any chance of a cease-fire.

XAU/USD surged on the back of mounting speculation the United States (US) Federal Reserve (Fed) had no more room to delay rate cuts. The Fed is expected to deliver its first cut in the upcoming September meeting, with a potential 50 basis points (bps) trim on the table.

US data to be out this week may shed some light on the matter: The country will publish July inflation data next Wednesday. The Consumer Price Index (CPI) is foreseen to tick modestly lower compared to the previous month but still above the central bank’s goal of around 2%. However, it’s not all about inflation. Policymakers will have to assess the risk of an economic setback should they decide not to trim record rates.

XAU/USD short-term technical outlook  

From a technical point of view, XAU/USD is poised to extend its advance. In the daily chart, technical indicators have turned north after a brief consolidation within positive levels. Furthermore, the pair is trading above all its moving averages, with the 20 Simple Moving Average (SMA) gaining upward traction above already bullish 100 and 200 SMAs. XAU/USD has overcome the 23.6% Fibonacci retracement of the June/July rally at $2,438.80, a relevant support level in the case of a pullback.

In the near term, and according to the 4-hour chart, XAU/USD is overbought but giving no signs of changing course as the pair pressures its intraday high. Technical indicators, in the meantime, pared their advances and hover within extreme levels, reflecting the ongoing pause rather than suggesting an upcoming decline. Finally, the 20 SMA heads firmly north below the current level and above directionless longer ones, reflecting bulls’ dominance and maintaining the risk skewed to the upside.

  Support levels: 2,442.90 2,438.80 2,425.10

Resistance levels: 2,466.00 2,483.70 2,495.10 

First Wedge Target May See Pullback

That 2.27 price level was resistance on July 22. It also marks the beginning of a bullish descending wedge pattern (orange boundary lines). The beginning of the wedge is typically the minimum target for the pattern. Arguably, that target of 2.27 was reached with today’s high of 2.26. After today’s close a drop below the 2.155 low of the day will trigger a daily bearish reversal. The 20-Day MA is the first obvious target at 2.09.

20-Day MA is Crucial Near-term Support

A near-term bullish outlook would be maintained as long as natural gas stays above the 20-Day line. It had been marking trend resistance since late-June until last Thursday’s bullish breakout. Subsequently, if price is rejected to the upside upon approach, the 20-Day line will be confirmed as having switched to a line of potential support.

That would be bullish behavior that may mark the end of a retracement. However, there is also a potential support zone lower down around 2.03 to 2.02. That range begins with the low from last Thursday and was an area of daily support or resistance at more than several times over the past month.

Weekly Bullish Reversal Points to Higher Prices

If a pullback comes before a rally above the 2.27 interim swing high, it is anticipated to eventually resolve itself to the upside as a bullish reversal may still be in its early stages. In addition to a bullish wedge breakout last week, natural gas also triggered a bullish reversal on the weekly chart. Today’s advance further confirms the breakout. It was the first time in eight weeks that a prior week’s high was exceeded to the upside. This is bullish behavior occurring on the longer time frame chart, which is more significant than the daily and lower periods.

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

• Gold price consolidates the previous week’s late rebound, as the US CPI week kicks off.
• A sense of caution prevails on pre-US CPI anxiety and geopolitical risks, supporting the US Dollar.
• Dovish Fed bets could limit any Gold price downside while the 21-day SMA holds and the daily RSI stays bullish.    

Gold price is trading on the back foot near $2,430 early Monday, consolidating the previous week’s late recovery. Traders appear non-committal and refrain from placing fresh bets on Gold price,  bracing for an action-packed week, with US Consumer Price Index (CPI) inflation data in the spotlight.

Gold price braces for Iran-Israel escalation and key US data

Traders take account of the latest developments surrounding the Middle-East geopolitical tensions, with Israel preparing for an imminent attack by Iran, in retaliation for the assassination of Hamas leader Ismail Haniyeh in Tehran in late July. On Sunday, Axios reported that the Israeli intelligence community is put on a high alert, as it is believed that Iran has decided to attack Israel directly and may do so within days.

Meanwhile, ABC News reported early Monday that the Israel Defense Forces (IDF) intercepted roughly 30 “projectiles” that were identified as crossing from Lebanon into northern Israel. This comes even as Hamas proposed a cease-fire implementation plan after a diplomatic push from the United States, Egypt and Qatar for a new round of talks to take place between Israel and Hamas on Aug. 15 in either Doha or Cairo. 

If the Iran-backed militant groups, Hezbollah and Hamas, turn down any cease-fire attempts and attack Israel, the escalation could very well translate into a wider regional conflict. Mounting geopolitical tensions are likely to keep the safe-haven US Dollar (USD) buoyed, weighing negatively on the USD-denominated Gold price.

However, the downside in the Gold price could likely be cushioned by the increased bets that the US Federal Reserve (Fed) will lower interest rates by 50 basis points (bps) in September. Although the odds for such a move have fallen to less than 50% when compared to about 75% a week ago, the CME Group’s FedWatch Tool showed.

This could be attributed to Fed Governor Michelle Bowman’s caution on rate cuts during her speech on Saturday. Bowman noted that there is some further “welcome” progress on inflation even as inflation remains “uncomfortably above” the central bank’s 2% goal.

Markets remain in a wait-and-see mode before taking any calls on the next Gold price direction, as position readjustments could be seen heading into Wednesday’s US CPI showdown. The headline annual CPI is set to rise 2.9% in July after increasing by 3.0% in June. Meanwhile, the core inflation is expected to edge a tad lower to 3.2% YoY in July versus June’s 3.3% print.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price keeps its range while holding within a symmetrical triangle formation.

The key leading indicator, the 14-day Relative Strength Index (RSI) holds well above the 50 level, suggesting that upside risks remain in place for Gold price in the near term.

Gold buyers also stay hopeful so long as the  21-day Simple Moving Average (SMA) at $2,417 holds.

However, if the pullback extends, sellers need to crack the 21-day SMA on a daily closing basis to unleash further downside.

Further south, the $2,400 threshold will come into play, below which the rising trendline support at $2,388 will be under threat.

Alternatively, the immediate upside barrier is seen at the August 5 high of $2,459, above which the falling trendline resistance at $2,465 and the two-week high of $2,478 will be challenged.
 

• 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.

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• 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.

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