Gold and Silver Analysis, Prices, and Charts
- The latest Fed rate expectations show six quarter-point cuts this year.
- Gold and Silver struggle but the sell-off is so far contained.
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Most Read: Gold and Silver Weekly Forecast: Tempered Rate Cut Bets Pose a Headwind
The latest look at US rate expectations shows six quarter-point cuts are now being priced in with the first seen in May compared to seven last week with the first in March.
The yield on the rate-sensitive UST 2-year has risen from 4.14% to a current level of 4.40% over the same period, highlighting the tempering of rate cuts ahead of next week’s FOMC meeting.
UST 2-Year Daily Yield Chart
There are three heavyweight pieces of US economic data released this week, the first look at US Q4 GDP on Thursday, along with the latest Durable Goods release, and the Core PCE report on Friday. All of these will be closely watched by the Fed ahead of next week’s FOMC meeting.
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For all economic data releases and events see the DailyFX Economic Calendar
Gold is currently stuck in a rough $2,000/oz. – $2,040/oz. trading range and is likely to remain there ahead of the data releases. A series of higher lows continue to support the precious metal, while current price action on either side of the 20- and 50-day simple moving averages is clouding the issue at the current time. A break lower brings prior support at $1,987/oz. into play.
Gold Daily Price Chart
Chart via TradingView
Retail trader data show59.13% of traders are net-long with the ratio of traders long to short at 1.45 to 1.The number of traders net long is 7.39% lower than yesterday and 3.25% lower than last week, while the number of traders net short is 2.08% lower than yesterday and 5.86% lower than last week.
See how daily and weekly changes in IG Retail Trader data can affect sentiment and price action.
| Change in | Longs | Shorts | OI |
| Daily | 0% | -3% | -1% |
| Weekly | 2% | 3% | 2% |
Silver is pushing higher today after a multi-week sell-off from late December. Silver fell below $22/oz. briefly on Monday, printing a fresh multi-week nadir before recovering today to trade around 1.1% higher on the session. The silver chart remains weak, printing short-term lower highs and lows, while the CCI indicator shows the precious metal in oversold territory. The cluster of lows made in early October around $20.71 may still be under threat.
Silver Price Daily Chart
What is your view on Gold and Silver – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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The global economy is cyclical in nature, with various factors influencing the rise and fall of different markets. One of the main influencers is the release of data, especially in the United States, as it is the world’s largest economy. This data has a significant impact on the gold and silver markets, as these precious metals are used as safe haven investments in times of economic uncertainty. In recent times, the US data has been indicating a strong recovery, causing some to speculate that gold and silver may continue to struggle. In this article, we will analyze the relationship between US data releases and the gold and silver markets and explore whether they will continue to struggle or see a resurgence in the near future.
The Dynamics of Data and Precious Metals
Before diving into the impact of US data releases on the precious metals market, it is essential to understanding the dynamics of data and how it affects these markets. Economic data is used as a barometer to measure the health of a country’s economy and is released by various government and private agencies. This data includes information on employment, inflation, economic growth, and consumer spending, among others. Investors and traders use this data to make informed decisions on their investments, and it also affects the overall market sentiment.
Gold and silver, being perceived as safe-haven investments, tend to perform well during times of economic turmoil or uncertainty. Investors flock to these metals as a way to protect their wealth and hedge against market volatility. On the other hand, during periods of economic stability and growth, these investments tend to underperform, as investors move towards riskier, higher-yielding assets.
Impact of Positive US Data Releases on Gold and Silver
The US has been showing signs of strong economic recovery in recent months, with positive data being released across various sectors. This has mainly been driven by the country’s successful vaccination drive and easing of COVID-19 restrictions, allowing businesses to resume operations. As a result, the stock market has been performing well, with the S&P 500 index reaching record highs. Such an environment makes it less attractive for investors to hold onto gold and silver, leading to a decline in their prices.
Another factor that has been contributing to the downward trend in gold and silver markets is the increasing interest rates in the US. As the economy recovers and inflation expectations rise, the Federal Reserve has hinted at a possibility of raising interest rates sooner than expected, leading to a strengthening of the US dollar. As gold and silver are traded in US dollars, a stronger currency makes them relatively more expensive for buyers in other currencies, leading to a decline in demand and prices.
Looking Ahead – Will Gold and Silver Continue to Struggle?
While the current trend may suggest a struggle for gold and silver, there are factors that could potentially turn things around in the near future. The most significant factor is the unpredictable nature of the pandemic and its variants. The Delta variant, which has been gaining traction in many countries, has led to fears of new lockdowns and restrictions. If this happens, investors would once again turn to gold and silver, driving up their prices.
Moreover, the US is also facing potential risks with their massive stimulus packages and mounting debt. If these issues are not addressed effectively, inflation could spiral out of control, leading to investors flocking back to safe-haven assets like gold and silver. Geopolitical tensions and global economic instability could also contribute to a resurgence in demand for these precious metals.
Practical Tips for Investors
As always, diversification is key for investors looking to navigate through uncertain times. While gold and silver may continue to struggle in the short term, their long-term potential cannot be ignored. Therefore, it is essential to have a well-balanced investment portfolio, including a mix of safe-haven assets and riskier investments.
Investors must also keep a close eye on US data releases and their impact on the market sentiment. Key data to watch out for includes employment reports, consumer sentiment index, and inflation data. Keeping a pulse on these factors can help investors make informed decisions and adjust their portfolios accordingly.
Conclusion
The US data releases do have a significant impact on the gold and silver markets, with positive data leading to a decline in their prices. However, there are always uncertainties and risk factors that can quickly change the market sentiment and lead to a resurgence in demand for these precious metals. Therefore, investors must stay informed and take a long-term view when it comes to their investments in gold and silver. With proper diversification and close monitoring of economic data, investors can weather the storms and take advantage of potential opportunities in the precious metals market.
