Gold and Silver See Saw

Observing the precious metals market in recent months has been a bit of a rollercoaster. Gold and Silver seem to be on a see-saw, swinging from highs around US $25 to lows of US $22. This fluctuating behaviour can be frustrating for some bullion investors, but it presents an opportunity for others. Buying bullion when prices are at the lower end of this range, especially as the 200- day moving average (200MDA) continues to push prices upwards, can be a smart approach for “averaging in” your metals purchases.

In the equities market, there’s a steady upward momentum. The ASX200 is showing higher lows on a yearly chart, which is a positive sign for a stronger than expected recovery. Recently, the Reserve Bank of Australia (RBA) decided to keep interest rates unchanged, citing pressure from China as a reason to maintain the current course and await more information before considering any additional rate hikes. Although the RBA’s communication remains hawkish, economists are suggesting that the RBA might start easing rates as early as March next year.

Oil has also jumped up, as we predicted a few weeks ago. As always, when Oil moves, so does the rest of the economy. Inflated Oil prices should give precious metals and commodities some stability into the next quarter. Keep an eye on Oil as its pricing eases down, as it could easily put downwards pressure on gold and silver.

From the US, we have some economic data to consider:

– Factory orders for July: -2.3% (previously 2.3%)

– US trade deficit: -$68.3 billion (previously -$65.5 billion)

The negative factory orders signal that businesses are taking on less new debt to purchase machinery or other components for business growth. This could potentially lead to a slowdown in business output. It remains to be seen whether this is a temporary pause in business spending or an ongoing concern.

Enjoy today’s charts, and we’ve added some highlights to make them more engaging for you.

Gold daily, with 200MDA

Silver daily, with 200MDA

Showing recent ranging for silver, and higher lows. Pressure on a higher low to be considered in the coming few weeks.

ASX200 with 200MDA

Highlighting higher lows.