Gold holds range, but silver breaks key support

David Morrison

SENIOR MARKET ANALYST

31 July 2025

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Gold and silver came under heavy selling pressure yesterday. Traders lightened up their exposure to both precious metals as the US dollar rallied. Gold bounced back this morning as bulls used the pullback to add to long positions. Despite the sharp moves, gold continues to trade within a range which has been building over the past two months. Support comes in around $3,250, while $3,450 marks resistance.

But the situation in silver looks quite different, as yet again, the two precious metals diverge. Silver came under another bombardment of selling this morning. Prices broke below $37 per ounce, which took silver into a band of support which stretches down below $36. Apart from some moderate support around $34.50, there’s very little between here and $32 per ounce.

Source: TN Trader

The thing about silver is that you never can tell. Big moves often appear to come out of nowhere, and there’s nothing that says prices can’t suddenly turn on a sixpence. Perhaps the bulls can take some consolation in seeing how rapidly the daily MACD is breaking down from relatively overbought levels. If prices do have further to fall, then this should help to reset the MACD back to neutral, or even negative levels. If so, then that should help reset the MACD to an area from which silver could rally once again.

It's also worth noting that there’s a popular view that a hard and fast negative correlation exists between the US dollar and precious metals (valued in dollars). History shows that any such correlation is poor, and can’t be relied on to provide accurate trading signals.

Despite this, in the current environment, which follows seven months of dollar weakness, if the dollar can continue to rally from here, it may persuade investors to cut back their exposure to gold and silver, at least in the short-term. But that doesn’t necessarily mean that both can’t take another leg higher.


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