Gold and Silver Performances Flat on January 5
The precious metals complex traded range-bound today, with gold (XAU) and silver (XAG) prices stuck in a tight spot, unchanged from the previous day's close.
| Metal | Price (USD) | Change | % Change | Day High | Day Low |
|---|---|---|---|---|---|
| Gold (XAU) | 4417.80 | 0.00 | 0.00% | 4461.98 | 4373.62 |
| Silver (XAG) | 574.80 | 0.00 | 0.00% | 580.55 | 569.05 |
Gold Technical Analysis
Gold has been stuck in a narrow range, unable to break above the key resistance level of $4465. As prices hover around this area, traders are waiting for a catalyst to push gold higher or lower.
- Support: $4373 (Jan 4 low) and $4332 (Dec 23 low)
- Resistance: $4465 (Jan 5 high) and $4530 (Nov 21 high)
The Relative Strength Index (RSI) is neutral, indicating a lack of momentum in either direction. However, the Moving Average Convergence Divergence (MACD) is beginning to show signs of bearish divergence, suggesting that gold's recent price action may be weakening.
From a macroeconomic perspective, inflation remains elevated, which should provide support for gold prices. However, the recent increase in yields has tempered some of this enthusiasm. With central banks expected to maintain accommodative policies, we don't see significant upward pressure on interest rates that could hurt gold.
Our short-term trading bias is Hold for gold. While it's unlikely to break above $4465 anytime soon, a move below $4373 would be concerning and may trigger additional selling.
Gold Macro Analysis
Gold prices have been largely influenced by inflation expectations and the subsequent impact on interest rates. With inflation remaining high, gold should continue to benefit as investors seek safe-haven assets. However, the recent increase in yields has created some headwinds for gold.
The US Federal Reserve's (Fed) continued commitment to accommodative policies is a positive for gold. The Fed's willingness to tolerate higher inflation and maintain an easy monetary policy is expected to support gold prices in the short term.
Silver Technical Analysis
Silver's price action has been closely tied to gold, as evident from the unchanged price today. However, silver's range-bound trading does not necessarily indicate a lack of interest from investors.
- Support: $569 (Jan 4 low) and $561 (Dec 23 low)
- Resistance: $580 (Jan 5 high) and $592 (Nov 21 high)
Silver's RSI is also neutral, similar to gold. However, the MACD is showing some signs of bearish divergence, suggesting that silver's recent price action may be weakening.
From a macroeconomic perspective, inflation expectations remain elevated, which should provide support for silver prices. The recent increase in yields has had less of an impact on silver compared to gold, as investors continue to seek safe-haven assets.
Our short-term trading bias is Buy for silver. While it's unlikely to break above $580 anytime soon, a move below $569 would be concerning and may trigger additional selling.
Silver Macro Analysis
Silver prices have been influenced by the same macroeconomic drivers as gold, with inflation expectations and interest rates playing a significant role in its price action. However, silver's more industrial usage has made it less sensitive to yield movements compared to gold.
Investors seeking safe-haven assets are likely to favor silver over other precious metals due to its lower price point and higher liquidity. The recent increase in yields has had less of an impact on silver prices, as investors continue to seek refuge in the metal.
Conclusion
In conclusion, both gold and silver prices have been range-bound today, with no clear direction from either metal's trading action. Our short-term trading bias remains Hold for gold due to the lack of momentum in its price action, while our bias is Buy for silver due to its relatively more attractive safe-haven appeal.
Investors should remain cautious and wait for a catalyst to break the range-bound trading. Key support and resistance levels for both metals have been identified above, and traders should closely monitor these areas as they may trigger significant price movements in either direction.
Risk management remains essential at this juncture, and investors are advised to adjust their positions accordingly based on their individual risk tolerance and market expectations.
By Malik Abualzait
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