Commentary for Friday, Nov 15, 2024 (www.golddealer.com) – Today gold closed down $2.50 at $2565.70, and silver closed down $0.14 at $30.37. There are still plenty of reasons which support both higher and lower gold. The list begins with the new president, moves to an uncertain interest rate future, and should gather further safe haven support over problematic leadership in the Middle East. But even with these crosswinds traders seem to be focused on a single question. Will gold finally reverse direction, after bouncing higher after reaching $2558.00 this morning? If so, the free fall we have seen in the metals these last few weeks is either over or close to a comfortable bottom. If not, the technical guys are expecting it to test $2500.00 and perhaps trend lower. This would present at least a $300.00 loss to investors who bought gold’s most recent peak at $2800.00 this year. At this point are investors getting ready to bail or getting ready to double down? Last Friday gold closed at $2687.50 / silver at $31.36. On the week gold was down $121.80, and silver was down $0.99.
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On Monday we were closed for Veterans Day, but the commodity markets were open, and the closing prices were again troubling for the bulls. Gold closed down $76.30 at $2611.20, silver closed down $0.82 at $30.54, platinum closed down $9.30 at $964.30, and palladium closed down $9.50 at $979.40. Some traders attribute the last two weeks of significant losses in the metals to the Trump win. Others blame the subsequently stronger dollar. The Dollar Index has moved from 104.00 last Wednesday through 106.00 this morning.
It figures that safe haven demand may cushion these looses as death and destruction are promised by both sides in the Middle East. But a look at the wider pricing view may be more helpful. The price of gold this past month peaked in late October ($2790.00) and reached recent lows ($2600.00) in early November, a surprisingly steep decline of $190.00. Silver reached highs ($35.00) in late October and lows ($30.31) in early November losing $4.69.
Today this price decline seems to be cooling off and perhaps stabilizing but the chart experts remain defensive, claiming solid technical support for gold at $2500.00, and for silver $29.00. Always ignore the extremes in both the gold and silver tea leaves. When gold broke above $2700.00 everyone was sure that $3000.00 gold was right around the corner. And when silver broke above $34.00, traders began to think that $50.00 was a good next option.
Well, both extremes were quickly ignored and both metals settled, very much like we are seeing today on the trading floor. I reject the theory that these falling prices are encouraging the bears. Both gold and silver are cooling, but previous losses are large enough to suggest that we are oversold in both gold and silver. This latest so called “price disaster” in gold and silver bullion might very well seem cheap a decade from now. And our shipping department hit its insurance limit early in the day suggesting that the public is buying more bullion than they are selling.
On Tuesday gold was down $11.20 at $2600.00, and the price of silver was up $0.15 at $30.69.
On Wednesday gold and silver prices rose as the traders reacted to fresh US inflation data. But traders sold this rally at highs of the day ($2614.00) as gold moved lower, once again testing the $2600.00 support and silver moved off highs of $31.00 to also test support at $30.55. Technical gold and silver experts now see the bulls and bears on an even playing field. It’s important to note several things. The first is that even with significant losses in both gold and silver yesterday’s closing price for gold held $2600.00 and silver held at $30.00. Second, the price of gold and silver moved into the red this morning, so traders are testing support, but it’s not aggressive. This is not to say the bulls are out of the woods by any means. If interest rates continue to move higher it would generally lead to lower prices in the metals.
We have a mixture of cooling prices supported by the expectation of lower interest rates, if not in the immediate future at least beginning to support bullish sentiment early in 2025. Whether or not the metals will move higher because of a Trump presidency remains to be seen. But if you ignore the short term – Trump will be good for the metals in 2025 because worldwide tension may increase over his expected tougher foreign policy.
It’s fair to say that I’m less optimistic than I was yesterday because inflation may be indelible, stubborn and “sticky”. It was for the Democrats and will be for the Republicans because both parties are big spenders. Sooner or later inflation numbers will reinvent themselves. It might take longer for the arithmetic to work through the system with Trump. But in my opinion new record highs for gold and silver are inevitable over the longer term because the Republicans are no better at balancing the books than the Democrats.
FXEmpire (Christopher Lewis) – Gold Continues to See Uptrend Effect After CPI – “The Consumer Price Index numbers came out as expected in the early hours of the US Wednesday session, and as a result, it looks as though the gold market could very well continue the overall longer term uptrend that we have been in previously. Technical Analysis – The $2,600 level has offered a bit of support as the large round psychologically significant figure has now proven itself to at least be interesting. The consumer price index numbers in the United States came out as expected early on Wednesday, so therefore I think you have a little bit of a relief here. Whether or not we can continue to go to the upside remains to be seen, but really at this point in time, I think you have to look at this through the prism of a market that is offering enough value that people are willing to step in and take advantage of it. Even if we were to break down below there, then we could go down to $2,500, where I think at that level, we would see a lot of psychological importance as well. But with this being the case, it’s interesting that we would bounce from here because we have dropped so hard from the $2,800 level. And I think given enough time, we will probably try to get back there. Keep in mind that central banks around the world are buying gold. And of course, central banks around the world are also cutting interest rates. So, with all of that being said, I think it lines up quite nicely for gold to go higher. The geopolitics piece might be cooling off a little bit because it does seem like the United States may be less interventionalist. And that could bring a lot of these wars to the negotiation table. It’s early, but that’s the hope with the new Trump administration. Gold’s been in an upturn for quite some time. That would be reason enough to be looking for buying opportunities. So, we’ll have to see if we can pick up a little bit of momentum here. Silver Continues to Look For Momentum to The Upside – The silver continues to see a lot of interest from traders, as the $30 level has offered a bit of support over the last 48 hours. Furthermore, the Consumer Price Index numbers have come and gone, with readings being as expected, and now we continue to see value hunting. Technical Analysis – The silver market has rallied a little bit during the early hours on Wednesday, and now that we have the consumer price index numbers coming out of the United States basically as expected, I think the market is breathing a sigh of relief and silver is starting to gain as a result. We do have the 50-day EMA sitting just above that could cause a little bit of resistance, but ultimately, I think that is but a minor footnote when it comes to what happens next. Over the longer term, I fully anticipate that this market will go looking to much higher levels, perhaps to the $32.50 level. That’s an area that’s been important multiple times, and therefore it wouldn’t be surprising at all to see this market react to that. Anything above the $32.50 level then opens up the possibility of going all the way back to the swing high, which is at the $35 level. Keep in mind that silver is an extraordinarily volatile contract under the best of circumstances, and it is bigger than gold, so don’t trade it with a massive position size. I have seen a lot of retail traders wipe their accounts out trading silver thinking it behaves exactly the same as gold. It really doesn’t. There are other fundamentals you have to think of, although some do overlap, such as interest rates. Silver is an industrial metal, so we’ll have to see how that comes into play, but really at this point in time, I think the most important thing to notice is that we have the $30 level offering support, and it does look like it’s going to hold.”
On the day gold closed down $19.20 at $2580.80, and silver closed down $0.10 at $30.59.
On Thursday the price of gold moved between $2540.00 and $2570.00, finishing the day mildly in the red and remaining a defensive market. Silver was also defensive, moving from highs of $30.60 to lows of $29.80. It did however recover, finishing the day at $30.40 – technical plus.
The downward drift in both metals suggests this trade remains “heavy”. You should however break the current picture into two parts to better understand what looks like opposing forces. The first part is the election of a new President. Rumors about the Trump transition and confusion over interest rates should have been the first heads up warning when Trump closed the gap between himself and Harris. Still, take some solace in the notion that even after weeks of lower prices both gold and silver are not falling out of bed. A bullish plus.
The second part would be the consideration of a geopolitical world that is in the midst of serious and threatening changes. Relations between adversaries and allies are getting more complicated and strained. This will underpin metal prices in the short term. And, in my mind, will ensure higher prices over the longer term because inflation never goes away, it slowly reinvents itself.
These two “parts” come together to form a complicated pricing picture. And how is the public reacting? With a great deal of patience. They are simply waiting for fresh information which will help them decide. This conclusion comes from the notion that during this transition we have not seen large sellers or buyers across our trading desk.
FXEmpire (Christopher Lewis) – Gold Continues to See Pressures – “The gold market fell again in the early hours of Thursday, as the market continues to see a lot of questions asked about the future outlook of the global economy and interest rates. The gold market also has been trying to deal with the idea of a very strong US dollar, which is toxic for any longer-term run higher. Technical Analysis – The gold market fell pretty significantly during the early hours on Thursday, but it does look like we are starting to turn things around and show signs of life again. Because of this, I think you’ve got a situation where eventually we will recover and bounce, but the recent US dollar strength has been like a wrecking ball for gold and in all fairness, several other assets. We did breakdown below a significant trendline so it’ll be interesting to see how this plays out over the next few sessions, as the oversold conditions could be a major short-term factor. However, the longer-term isn’t as clear. Will this end up being a major trend shift, or will it be what is known as a throwover? If we turn around and break above the $2,600 level, then I think you’ve got a real shot at some type of recovery. With this being said, I think you have to also look at the $2,500 level underneath as crucial and a potential floor in the market. Anything below that level would be rather ugly, but as long as the US dollar continues to rock it higher gold is going to suffer. So do keep that in mind as the dollar has been a wrecking ball for most things, and at this point in time the interest rates in America continue to see upward pressures and therefore, the bonds in the US are attractive. Silver Continues to See Downward Pressure But Signs of Life Appear – The silver market continues to see a lot of downward pressure, as the market continues to work against the precious metals markets due to the greenback showing strong demand. This being the case, I think that the fortunes of the silver market lie with the fortunes of the US dollar, at least for now. Technical Analysis – The silver market fell pretty significantly during the early hours on Thursday only to turn around and show signs of life again. By doing so, the market has ended up forming a little bit of a hammer, but it looks to me like we could rally from here and try to get back to the 50-day EMA. If we do, that could be a nice short-term trade. The fact that we are bouncing the way we are does suggest that perhaps this is a market that I think given enough time will try to recover because we are so oversold. A lot of this will come down to the US Dollar and whether or not it is strengthening. It is so overbought at this point that a snapback rally in other assets makes a lot of sense, including silver. So, because of this, I am slightly bullish, but I also recognize that you’d have to be very cautious to buy this. If we break down below the bottom of the candlestick, then I think it opens up the possibility of a move to the 200 day EMA. The 200 day EMA of course is a major indicator that people use to show trends. So, anything below there, you’re looking at getting absolutely smoked. This has been a very vicious pullback, but that’s not that uncommon for silver, which is why I always say be cautious with your position size, because the leverage can get you hurt.”
On the day gold closed down $12.60 at $2568.20, and silver closed down $0.08 at $30.51.
On Friday traders faced a day with good and bad news for traders. The bad news enforced the notion that gold continues to break down reaching $2558.00 in the early trade. The good news is that $2558.00 may be developing into an important pivot point for our shiny gold friend as traders bought this dip and pushed the paper market to highs on the day of $2576.00. The bulls will jump on this bounce to higher ground, expecting a renewed inflation wave. And the bears will wait for the stronger dollar created by the Trump presidency to stymie higher prices in the short and medium term. So, you have pretty much a mixed bag going into the weekend.
FXEmpire (Arslan Ali) – Will $2,571 Pivot Hold Amid Strong Dollar Pressure? – “old prices (XAU/USD) traded around $2,560 on Friday, weighed down by a strong US Dollar and renewed concerns over the Federal Reserve’s interest rate path. Although gold briefly regained ground, it struggled to hold momentum as the dollar’s strength persisted, driven by inflationary pressures that complicate the case for rate cuts. The US Dollar Index (DXY) remains close to 106.80 after recently pulling back from its yearly high of 107.06, spurred by a cooling in “Trump trades.” The Producer Price Index (PPI) for October showed a 2.4% year-over-year increase, above forecasts, with the Core PPI rising by 3.1%. These figures indicate ongoing inflationary pressures, which typically reduce gold’s appeal since higher inflation can lead to interest rate hikes, increasing the opportunity cost of holding non-yielding assets like gold. Middle East Tensions Offer Limited Support – While geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict traditionally support gold as a safe-haven asset, market reactions have been subdued. Investors appear focused on the strength of the US Dollar and potential shifts in Fed policy as primary market drivers. “Gold’s safe-haven appeal remains, but the strong dollar and inflation signals are currently outweighing geopolitical concerns,” noted David Liu, a market strategist at FX Consult. Upcoming Data and Fed Signals – Investors are keenly awaiting the release of US Retail Sales data and the NY Empire State Manufacturing Index for October, along with Industrial Production numbers. Remarks from Fed officials Susan Collins and John Williams later today may also provide insight into the Fed’s stance on inflation and interest rates. Federal Reserve Bank of St. Louis President Alberto Musalem recently emphasized the challenges of cutting rates amid inflation, while Fed President Jeffrey Schmid dismissed expectations for a return to near-zero rates, calling such hopes “unrealistic.” The stronger dollar and persistent inflation concerns, coupled with the Fed’s cautious approach, could continue to weigh on gold prices. As higher inflation often leads to higher rates, gold’s attractiveness as an investment remains subdued in the current environment. Short-Term Forecast – Gold prices may stay under pressure below $2,571, with the strong dollar and inflation concerns limiting upside. A break above this pivot could attract renewed buying interest. Technical Analysis – Gold is trading at $2,560.68, down 0.16% as it hovers below the pivot point at $2,571.81, signaling a cautious market mood. Right now, the 50-day EMA at $2,598.10 and the 200-day EMA at $2,665.27 both sit above the price, reinforcing a bearish outlook. Immediate support rests at $2,538.40, with stronger floors at $2,511.84 and $2,491.71 if downward momentum picks up. On the upside, gold needs to break past $2,571.81 to target resistance at $2,594.09 and potentially $2,618.93. Unless it climbs above the pivot, the current trend remains bearish, but a move higher could spark some renewed buyer interest.”
On the day gold closed down $2.50 at $2565.70, and silver closed down $0.14 at $30.37.
Platinum closed up $1.10 at $939.80, and palladium closed up $17.90 at $941.30.
Jim Wycoff (Kitco) – “Technically, December gold bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,650.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support $2,500.00. First resistance is seen at Thursday’s high of $2,585.80 and then at $2,600.00. First support is seen at the overnight low of $2,558.90 and then at this week’s low of $2,541.50. December silver futures bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $31.00 and then at $31.25. Next support is seen at the overnight low of $30.305 and then at $30.00.”
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