Jump to content

Market update: gold rally pauses after hitting new high, amid growing demand


Recommended Posts

Gold's climb stalls despite strong central bank and Chinese buyer interest, while silver meets key resistance, spotlighting pivotal movements in metals market.

 

original-size.webpSource: Bloomberg

 

Written by: Richard Snow | Analyst, DailyFX, Johannesburg
 
Publication date: 

Gold retreats after tagging 1.618 Fibonacci extension

The weekly gold chart showcases the precious metal’s bullish continuation, taking out numerous all-time highs with ease. The prospect of fewer rate cuts from the Fed and a stronger US dollar have hardly affected the high-flying commodity, which continues to thrive on solid central bank buying; and a pickup in retail purchases from Chinese citizens.

With gold breaking new ground, resistance targets are difficult to come by. Therefore, the 1.618% extension of the major 2020 to 2022 major decline helps project the next upside challenge at $2360. Price action does appear to have pulled away from the level, but the move is minor at this juncture.

Gold weekly chart

 

original-size.webpSource: TradingView

The daily chart portrays the extent to which this market is overheating, with the RSI continuing to trade in overbought territory. Prices trade well above both the 50 and 200-day simple moving averages, a bullish landscape for the metal.

Today, gold appears to be stabilising after yesterday’s hot CPI data which propelled yields and the dollar higher – effectively adding a premium to the price of gold for overseas buyers.

The sheer pace of the advance suggests the invalidation levels for the bullish outlook appear at the prior all-time high of $2195. Even a move to the $2222 level wouldn’t necessarily rule out a further bullish move, but it may prompt a reassessment of the bullish bias.

Gold daily chart

 

original-size.webpSource: TradingView

Silver hits a prior, longer-term zone of resistance

Silver, like gold, continues its bullish advance, but has recently hit a zone of resistance that appeared in late 2020, and early 2021. The zone appears around $28.40 and capped silver prices around the Covid boom. The next target to the upside is $30.10 which represents a full retracement of the 2021 to 2022 decline.

Should the level propel bulls from here, the 78.6% retracement comes into play at $27.41, followed by $26.10.

Silver weekly chart

 

original-size.webpSource: TradingView

The daily chart hones in on recent price action, which appears to stabilise beneath the zone of resistance. Notably, the RSI flashes red as silver continues to trade in overbought territory, suggesting bulls may need to catch their breath.

Silver daily chart

 

original-size.webpSource: TradingView

 

 

 

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • If you've encountered Drift Protocol but couldn't quite comprehend its role in the DeFi realm, this article aims to elucidate the project's mission and its attempts to address major hurdles in the world of decentralized trading and finance. Fundamentally, Drift Protocol is a decentralized exchange (DEX) built on the high-performance Solana blockchain, facilitating transparent, non-custodial trading without any central entities holding custody of your assets. All transactions occur directly peer-to-peer through secure wallet integrations like Phantom, eliminating the necessity to entrust shady centralized exchanges with your hard-earned crypto. However, Drift transcends the boundaries of a conventional DEX. It's an all-encompassing ecosystem encompassing spot trading, perpetuals, borrowing, lending, staking, and liquidity pools – the entire spectrum. Remarkably, they even offer automatic yield on your account holdings, essentially providing free money for your consideration. What truly sets Drift apart is its cutting-edge liquidity solutions. They employ multiple mechanisms such as limit order books, AMMs, and an innovative "Just-In-Time Auction" system that brings in market makers to provide on-demand liquidity for traders. It's akin to having an entire army of liquidity ninjas at your disposal. Their Dynamic AMM is a game-changer as well. Unlike the static liquidity we're accustomed to, it dynamically adjusts and recalibrates the liquidity pools based on real-time trading demand, translating to better capital efficiency and reduced slippage for traders. And let's not overlook the bots! Drift has an integrated bot system that allows you to automate your trades and execute complex strategies far more efficiently than manual execution. With over $340 million in total value locked and nearly $19 billion in traded volume from their 169,000+ users, Drift Protocol is clearly onto something substantial. Moreover, they recently raised $23.5 million in a Series A funding round led by Polychain. Drift Protocol is truly pushing the boundaries of what a DEX can be – aggregating various DeFi services, solving liquidity challenges, and providing traders with professional-grade tools, all while maintaining full decentralization on the Solana blockchain. This project has certainly piqued my interest, and it could be a game-changer for us crypto enthusiasts.
    • Allow me to unveil the revolutionary Lifeform project – a groundbreaking development in the realm of virtual identities and avatars for the web3 world.   At its core lies a mind-bogglingly innovative concept. They've developed a state-of-the-art editor that empowers users to create hyper-realistic 3D virtual human avatars, which can serve as digital identities across the metaverse and web3 applications. Brace yourself for a staggering number – over 10 billion possible combinations of facial features and body details, all powered by the cutting-edge Unreal Engine 5, the very same technology behind blockbuster movies and top-tier video games. Impressive, isn't it? But here's the real kicker – these avatars aren't merely for virtual worlds. With Lifeform's DID solution, you can actually utilize your custom avatar as a login method and verified identity for any decentralized app or metaverse platform. It's an NFT-based digital ID that seamlessly grants you access to the entire web3 ecosystem. Remarkably, as early as March 2023, Lifeform had already become the most widely used dApp on the BNB Chain, boasting over 3 million monthly active users. This rapid adoption is a testament to the virtual identity concept's meteoric rise. On top of that, their AI analyzes user activity across blockchains, providing personalized service recommendations based on your crypto asset management strategies. It's a sleek, all-in-one web3 identity platform like no other. And the surprises don't end there. These avatars aren't limited to the metaverse; you can beam your virtual self into Zoom calls, Google Meet, online conferences – you name it. Your avatar mimics your movements and expressions in real-time, courtesy of their cutting-edge plugin. It's like being a real-life hologram! Lifeform is single-handedly bridging the gap between our physical and digital identities in an incredibly accessible manner. They are undoubtedly the key to onboarding the next billion users into the web3 space. It's a genius concept, if you ask me. You can check out it's token $LIFEFORM on the Bitget exchange as it recently got listed. 
    • Ready to experience the power of the latest Telegram Signal Bot? Explore the exchange BetterTest Event and witness the potential for yourself! Experience firsthand the accuracy and efficiency of a unique signal bot in real-time trading scenarios. Test its capabilities and see how it can enhance your trading experience. Why Participate? - Refine User Experience: Help us improve the product by providing valuable feedback. - Enhance Audience Reach: Leverage your dedicated audience channels more effectively. - Community Management: Intuitively manage your communities and improve follower quality. - Top Channel Management Tool: Collaborate with us to create an industry-leading platform. Will you miss this opportunity to engage with exchange cutting-edge technology and take your trading to the next level?
×
×
  • Create New...
us