Gold and Silver: Fell to a New Monthly Minimum

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Gold and Silver: Fell to a New Monthly Minimum 

Gold and Silver: Fell to a New Monthly Minimum 

• The price of gold yesterday fell to a new monthly minimum at the $1688 level.


• The price of silver fell below the $17.50 level yesterday.


• The sentiment is that the markets are convinced that the US central bank will continue to tighten its policy to reduce inflation, the tool being a 0,75% interest rate hike.

Gold chart analysis

The price of gold yesterday fell to a new monthly minimum at the $1688 level. Since then, we have seen a gold price recovery to the $1708 level. For now, we have support in the MA20 and MA50 moving averages, which could positively affect the price and push it even higher. Potential higher targets are $1710 and $1720 levels. For a bearish option, we need a negative consolidation and a return of the price below the $1700 level. After that, the pressure on the price of gold could increase, and we would see a further decline to the next support level. Potential lower targets are $1690 and $1680 levels.

Silver chart analysis

The price of silver fell below the $17.50 level yesterday but quickly consolidated and climbed above the $17.75 level during the Asian trading session. We are now trying to hold above and continue the recovery towards the $18.00 level. It currently has support in the MA20 and MA50 moving averages and based on that, and we could see some recovery. The strong dollar and the re-closure of cities in China due to new corona cases have a negative effect on the price of silver. We need a negative consolidation and a return to support at the $17.50 level for a bearish option. If we are not able to hold above, the price will break below, and the bearish trend will continue. Potential lower targets are $17.25 and $17.00 levels.

Market Overview

The sentiment is that the markets are convinced that the US central bank will continue to tighten its policy to reduce inflation, the tool being a 0,75% interest rate hike. This should be a tailwind for higher US bond yields and limit a potential correction to the dollar’s decline. The Fed’s interest rate hike also fueled fears that the US economy will be dragged into a deeper recession within the following year. And silver is mostly an industrial metal and suffers from any potential threat of recession.

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