Gold & Silver News | Sept 29th

This week the rallying US dollar hitting a four-year high limited buying interest in gold and silver. Despite a few short recoveries, gold ended down 0.1% on the week, around a nine month low. Silver, however, while usually following gold’s pattern showed unusual behaviour experiencing buying activity and ending the week on an up note, though still down 1.72% on the week.

Gold and Silver Prices Snapshot (Sept 29th):

7 Day Gold and Silver Charts

(Source: NASDAQ)

By Wednesday, Gold prices had ended the US day session moderately lower^[1], and on Thursday hit a nine-month low in early trading. However, gold prices recovered from the early Thursday losses and finished the day session back near daily highs; boosted by short covering and bargain hunters. The tide turned again by the week’s end, hovering back near the nine-month low in US trading Friday. December Comex silver however diverged with a recovery at the end of the week, moving up USD$0.062 to USD$17.505 an ounce. Mineweb reports that the rise in silver may be due to the stock market being overbought and heading for a fall, with silver seeing purchasing movement as it is said to provide better leverage than gold if precious metals prices were to sharply rise^[2].

The surging US dollar was a key feature of the market this week. The dollar was sitting at a four-year high, while the Euro saw a 14-month low. The dollar’s strength has mainly been supported by positive US economic data combined with downbeat European Union economic data. Increasing geopolitical tension was also a pressure, as the US military’s continued strikes against ISIS in Syria heightened risk aversion^[3]. Forbes stated that escalation of the situation in Syria or other geopolitical hotspots could prompt increased investor anxiety, causing a bearish stock-market and bullish safe-haven assets market for gold^[4].

Looking ahead, in the Kitco News Gold Survey, of 20 respondents the majority forecasted lower gold prices next week as the dollar strength and bearish technicals weigh on the metal. Four predicted higher prices, while 12 expected lower prices and the remaining four expected prices to continue trading sideways.

Meanwhile, Forbes reported that gold bears have a near-term technical advantage as prices sit in a 2.5-month downtrend. The next upside near-term resistance was described as first resistance at USD$1,225.00 and then at the overnight high of USD$1,232.70. The next near-term downside support was first at USD$1,215.00 and second at USD$1,208.80. For Silver, bulls’ have a near-term advantage with prices hovering near a four-year low. The next upside resistance was set to USD$17.725 and then at USD$18.99. The next downside price support was seen at the week’s low of USD$17.27 and then at USD$17.00^[5].

By Lisa Casagrande | https://www.goldbullionaustralia.com.au