Gold and silver: this now speaks for a consolidation!

Gold price rally

Was that just the big gold price rally? Or do we only see a very short breather in precious metals? At 10 a.m. this morning, the troy ounce of gold on the spot market cost $ 1,550. That corresponded to 1,397 euros. The silver ounce was trading at $ 17.90. After the relaxation signals in the US-Iran conflict, the prices of gold and silver came back at short notice.

 

Highly affected at all times

On a daily basis, the euro gold price had scratched at $ 1,412 an ounce last Tuesday at the all-time high of September 3, 2019 (€ 1,418). Intraday, the record was already surpassed on Wednesday at 1,452 euros (based on US futures). What happens now?

 

Before the weekend

This afternoon, at 2:30 p.m., official US labor market data for the month will be released (non-farm payrolls). The ADP job market report with figures on private job placement in the US on Wednesday clearly exceeded expectations with 202,000 new jobs. It was the best result since April 2019. In addition, the previous month’s figures were revised up sharply – from 67,000 to 124,000 new placements. However, in the past, both labor market statistics (ADP and government figures) have always differed significantly in their tendencies.

 

Technicals

In purely technical terms, the euro gold price has been in the accelerated upward trend since the beginning of December. The short-term critical mark of 1,400 euros is now contested. At the daily closing price on Thursday yesterday, gold was trading slightly below this threshold. Overall, the situation is overbought, with an RSI (Relative Strength Index) just above 70. There is therefore an increased likelihood of a reset, at least up to the support of EUR 1,380.

 

Market sentiment

The latest picture story (“Should I buy gold now”) is in keeping with the current market mood. In the past, this was often a contraindicator, since this medium usually only deals with such financial topics when the hype is already high. The situation on the US futures market has also been showing signs of overheating for some time (gold: new records in US futures trading).

 

Outlook

So there is a lot to be said for a phase with somewhat weaker prices for gold and silver. Especially when the market situation continues to relax, both economically and geopolitically. This can lead to stronger consolidation for precious metals, should larger players switch to profit-taking. The current margin increase in US futures supports this possible scenario. But: The next Trump tweet is coming!