Gold and silver are once again showing strong bullish momentum, with technical and fundamental indicators aligning for a potential breakout. The release of key economic data from the United States and Canada today is expected to provide further direction to the precious metals market. The U.S. Non-Farm Payrolls (NFP) and Unemployment Rate reports, alongside Canada’s Employment Change data, will be crucial in shaping market sentiment. Weak job data from the U.S. could lead to a softer dollar, reinforcing the safe-haven appeal of gold and silver, while strong employment numbers may trigger temporary price corrections.
Recent price action suggests that gold (XAU/USD) is hovering near record highs, driven by increasing geopolitical uncertainties and growing concerns over inflation. A weaker-than-expected U.S. labor market report could take gold prices toward resistance around $3000 or above per ounce, reaffirming its bullish trend. On the other hand, any downside movement may find support near $2845 – $2850 per ounce. Similarly, silver (XAG/USD) continues to follow gold’s trajectory, with industrial demand adding an additional layer of support. If the economic data disappoints, silver could move towards $31.8 per ounce. With market participants anticipating a shift in Federal Reserve policy in the coming months, the bullion market remains well-positioned for a sustained rally. Gold and silver continue to act as hedges against economic uncertainty, and any signs of economic slowdown could further drive demand. Given the current macroeconomic backdrop, traders should watch for key support and resistance levels and remain alert to any policy shifts that could influence market dynamics. The upcoming data release will be pivotal in determining whether bullion extends its upward momentum or undergoes short-term consolidation before its next move higher.
From a technical perspective, an inverted head and shoulders pattern has been identified on the XAU/USD chart, signaling a potential bullish continuation. The pattern formation suggests a shift in momentum, with buyers gaining control. Currently, a small retest of the neckline is occurring, which often acts as a confirmation before further upside movement. If gold holds above the neckline support at $2858, we can expect a push towards the next Psychological key resistance level at $3000. The measured move from the breakout of this pattern suggests a potential upside target of $3000 or above, aligning with historical price action and volume confirmation.
Additionally, the Reserve Bank of India (RBI) has cut lending rates by 0.25 basis points, which could have a bullish impact on gold prices in the MCX market. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive for investors. This move could also lead to increased liquidity in the market, further supporting demand for bullion. Given India’s significant role in global gold consumption, this development could provide additional upside momentum to gold prices, reinforcing the ongoing bullish trend.
With market participants anticipating a shift in Federal Reserve policy in the coming months, the bullion market remains well-positioned for a sustained rally. Gold and silver continue to act as hedges against economic uncertainty, and any signs of economic slowdown could further drive demand. Given the current macroeconomic backdrop, traders should watch for key support and resistance levels and remain alert to any policy shifts that could influence market dynamics. The upcoming data release will be pivotal in determining whether bullion extends its upward momentum or undergoes short-term consolidation before its next move higher.
Until then, Happy Trading!
Commodity Samachar Securities
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Also Read: Copper Price Surge: Understanding the Factors Behind the Hike , RBI Cuts Repo Rate: A Strategic Move in Economic Shifts
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