Weekly Market Report | 28/08/2023

Aug 28, 2023 | Marketupdates | 0 comments

Gold Survives the Foray Below $1900; Charts Are Positive After Moving Average Convergence Divergence Buy Signal, United States Economy in Focus

Indications only | Closing prices are bids | Prices & Charts : Trading View | Market Research Refinitiv | See disclaimer below

Summary

Gold initially resumed its recent downward trend, dipping to an early low for the week of $1986 in Asia on Monday. However, good physical buying stemmed the weakness with the price recovering to $1890.10 at the morning benchmark in London. The rally extended to a high for the day of $1898 in early New York trading as the United States dollar gave up some of its recent gains. The price then eased back to end up 0.26% at $1895.

Gold posted its low of $1898 in early Asian trading on Wednesday and staged a sustained but modest rally in Europe to $1906. The rally picked up pace after the New York opening as a softer than expected global growth report sparked a sharp increase to $1920 amid good trading volume. This development cast a shadow over the upcoming Central Bank symposium. The yellow metal eased back to end with a 0.9% gain at $1915. Silver had a stellar day, slicing up through all the major moving averages to end up 3.84% at $24.31. A sharp 2% increase in open interest on the COMEX highlighted the influx of ‘fast money’ into silver. Platinum gained 1.19% to $934, and palladium rose 1.75% to $1282.
Gold initially resumed its recent downward trend, dipping to an early low for the week of $1986 in Asia on Monday. However, good physical buying stemmed the weakness with the price recovering to $1890.10 at the morning benchmark in London. The rally extended to a high for the day of $1898 in early New York trading as the United States dollar gave up some of its recent gains. The price then eased back to end up 0.26% at $1895.

Silver started strongly, rising 2.46% to $23.31 on good exchange-traded fund inflows. Platinum ended barely lower on the day at $912, while palladium eased 0.95% to $1245. Gold rallied to $1904 in Asia and Europe on Tuesday, with the London morning benchmark se
Gold staged a steady rally to $1922 in early Asia trading on Thursday and consolidated in Europe. However, the price fell back to a low for the day of $1912, shortly after the New York opening, following stronger than expected United States weekly jobless claims. This triggered a rally in the United States dollar and United States 10-year Treasury yields. A weak Durable Goods report and comments from two Federal Reserve officials suggesting that further rate hikes may not be necessary prompted an abrupt turnaround. Gold spiked to a high for the week of $1923 amid reasonable trading volume. The yellow metal ended with a nominal 0.10% gain at $1917. Silver succumbed to light profit-taking after this week’s stunning rally, ending down 0.78% at $24.12. Platinum extended its advance by a modest 0.43% to $938, but palladium fell 2.89% to $1245.

Gold held between $1913 and $1920 in Asia and Europe in cautious trading on Friday, as many players took to the sidelines. This was ahead of Federal Reserve Chairman Jerome Powell’s much-awaited address to the Jackson Hole Symposium. Market participants were looking for signals on the Federal Reserve’s forward-looking monetary policy. Powell’s measured comments sent a mixed message to global markets, leaving the door open for further interest rate increases but also stressing that decisions and policies would be data-driven. Gold’s reaction was erratic, with the price spiking to a high for the day of $1922, quickly followed by a sharp sell-off to a low of $1905. The metal recovered into the close to end in mid-range and down 0.16% at $1914. However, this represented a gain of 1.27% on the week. Silver rose 0.46% to $24.23 on Friday, rounding off a super week with a gain of 6.51%. Platinum posted a gain of 1.17% to $949 and was up an impressive 3.94% on the week. However, palladium resumed its downward trajectory, falling to $1230, a loss of 1.20% for the day and 2.15% on the week.

Looking ahead, the recovery in the gold price last week has triggered a Moving Average Convergence Divergence crossover buy signal on the charts. This was underlined by the break and close above the 200-day moving average pegged at $1910. This suggests further technical strength with the 50-day moving average set at $1931 as the initial target, with potential to reach the 100-day moving average located just below $1960. The United States economy will be the key focus for global markets, with a raft of key United States economic reports due to be released. These are headlined by the latest United States jobs data on Friday and should result in higher trading volumes and increased price volatility. Silver looks poised for a strong final four months of the year, with resistance at $25.50 as the initial target and potential for much higher levels. Platinum has recovered well from the dip below $900, and we expect the cluster of moving averages just below $1000 to be tested in the near term. Palladium will continue to dance to its own tune.

Gold Chart ($/oz)

Silver Chart ($/oz)

Platinum Chart ($/oz)

Palladium Chart ($/oz)

This document is issued by Value Trading BV. While all reasonable care has been taken in preparing this document; no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. Opinions, projections and estimates are subject to change without notice. This document is for information purposes only and for private circulation. It does not constitute any offer, recommendation or solicitation to any person to enter into transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration.