Gold and silver prices have experienced a decline in recent weeks as the geopolitical tensions that previously bolstered both metals began to unwind. While the situation in the Middle East remains tragic, the absence of a wider conflict involving other countries has dampened the safe-haven appeal of gold and silver.
Another contributing factor to the weakness in XAU/USD and XAG/USD is the reduced demand for safe-haven assets, as investors turned their attention towards the bullish equity market. The Nasdaq 100’s continuous rise and the fear of missing out have redirected traders’ focus away from non-yielding assets.
Amidst recent market dynamics, there are reasons for optimism regarding precious metals. One potential catalyst that could boost their prices is a pullback in interest rates. The US 10-year yield, which had surpassed 5.0% last month, has since corrected sharply lower to below 4.6% today. If this correction gains momentum, it could create a more favorable backdrop for gold and silver.
GOLD PRICE TECHNICAL ANALYSIS
Gold has experienced a modest retreat in recent days after failing to break through resistance at the $2,010/$2,015 range. If losses deepen, support levels are expected at $1,960 and $1,945, near the 200-day simple moving average. A potential stability in this area could pave the way for a recovery, but a breakdown may lead to a decline towards $1,920.
On the other hand, if the bulls stage a resurgence, breaking the overhead resistance at $2,010/$2,015, it could reignite bullish sentiment and set the stage for a rally towards $2,060. Further strength may empower buyers to challenge this year’s high at $2,085.
SILVER PRICE TECHNICAL ANALYSIS
Silver witnessed a sell-off, approaching confluence support around $22.55, where a medium-term ascending trendline intersects with recent swing lows. Buyers must defend this level to counteract selling pressure. Failure to maintain this floor could potentially push prices down to $22.20, with focus then shifting to October lows near the $21.00 mark.
Conversely, if buyers make a comeback and initiate an upside reversal, we may witness a move towards trendline resistance at $23.40, which coincides with the 200-day simple moving average. This level could prove to be a sturdy barrier, but in the event of a breakout, XAG/USD may advance towards the $24.00 threshold.
In light of evolving global trends and technical analysis, both gold and silver hold the potential for upside momentum in the near future. Traders will be closely monitoring market developments and key support and resistance levels for potential shifts in price direction.