Gold was firmer again overnight, building on last week’s gains. It has now tacked on around $200, or close to 5%, since the end of last week. The move has seen gold hit its best levels in around six weeks, back when it was dropping dramatically from the all-time highs hit in October. The prospect of another 25-basis-point rate cut before the year-end has boosted investor appetite, as has the related drop in the US dollar.
Source: TN Trader
A string of weaker US data releases and dovish remarks from Fed officials, including John Williams, Michelle Bowman and Christopher Waller, helped boost expectations for a rate cut to 88%. In addition, White House economic adviser Kevin Hassett, and candidate for the role of Fed Chair after Jerome Powell steps aside next May, aligned with President Trump in suggesting rates “should be lower.”
The daily MACD had also pulled back towards the ’neutral’ level, having been very overbought back in October. The rally in silver has been even more dramatic.
Silver hit a fresh record high this morning, coming within sight of $58 per ounce. That represented a gain of around 16% from its close of $50 just over a week ago. The move meant that the dreaded triple-top had been avoided. But it’s important to note that these gains came over a holiday period when liquidity was poor and followed an exchange shutdown due to a power outage affecting the CME Group. So, where it goes next is anyone’s guess.
