Precious Metals Forecast: Gold and Silver Slide by Over 0.50% as Copper Ascends

Key Insights

• The Israel-Hamas conflict and its potential escalation have been influential in the recent 5% spike in gold prices, reflecting the metal’s role as a safe haven during geopolitical turmoil.
• Technical analyses suggest a potential short-term bullish trend for gold, with a pivotal resistance at $1930, while silver remains bullish above the $22.22 mark.
• Copper displays a bearish sentiment below the price threshold of $3.63.

Quick Fundamental Outlook

Gold prices retreated on Monday after a strong surge in the previous week due to heightened safe haven demands amidst the Israel-Hamas conflict. The conflict had caused a 5% jump in gold prices as investors sought safety. The market keenly observes if the conflict might escalate further in the Middle East, particularly as Israel plans a ground operation in Gaza.

Last week’s U.S. inflation data indicates a continued hawkish stance by the Federal Reserve, suggesting prolonged higher interest rates. This stance has historically suppressed gold prices, and with rates expected to remain high, significant growth in gold’s value seems unlikely.

Despite gold’s increase on safe haven demands, the U.S. dollar remains the primary safety choice for investors, nearing a 10-month high recently. Elevated interest rates generally dampen gold’s attractiveness due to the increased opportunity cost of holding it, especially in the face of global economic challenges that usually boost its demand.

Gold Prices Forecast

On October 16, Gold (XAU/USD) displayed a slight bearish trend, trading around $1915, reflecting a near 1% drop from the previous day. From a 4-hour chart perspective, the metal’s pivotal point sits at $1899. Looking at potential barriers, immediate resistance is found at $1966, with subsequent levels at $1999 and $2065. Conversely, the immediate support rests at $1865, followed by $1800 and $1765.

Technically, the Relative Strength Index (RSI) currently reads 70, indicating overbought conditions. The MACD presents a value of 2.36, with its signal at 17.05, hinting at a potential upward momentum.

With Gold’s price currently surpassing its 50-Day Exponential Moving Average (50 EMA) of $1875, a short-term bullish trend is implied. However, a noticeable downward trendline sets resistance at $1930. In summary, the sentiment for the precious metal appears bearish below $1930, and any change above this level could signal a shift in trend.

Silver Prices Forecast

On October 16, Silver (XAG/USD) is observed trading at $22.573, marking a 0.50% decrease from its previous value. From a 4-hour chart perspective, a pivot point is identified at $22.36. In terms of resistance levels, the immediate barrier stands at $23.15, followed by subsequent resistances at $23.61 and $24.39. On the downside, Silver finds immediate support at $21.90, with the next supports positioned at $21.11 and $20.66.

The Relative Strength Index (RSI) records a value of 66, indicating a leaning towards overbought conditions, while the MACD registers at 0.035 with its signal line at 0.299, hinting at potential upward momentum.

Currently, the price surpasses its 50-Day Exponential Moving Average (50 EMA) of $22.02, suggesting a short-term bullish trend. Despite an upward channel recommending a buy, the resistance at $22.85 might curb the upside. In conclusion, the outlook remains bullish above $22.22, but any shift below this could reverse the sentiment.

Copper Prices Forecast

For October 16, Copper (trading at a price of 3.60) has shown an upward trend, appreciating by nearly 0.60%. Analyzing the 4-hour chart timeframe, the metal’s pivot point is $3.61. Immediate resistance is observed at $3.66, followed by $3.73 and $3.77. On the contrary, immediate support is seen at $3.55, with subsequent levels at $3.50 and $3.43. The Relative Strength Index (RSI) stands at 46, indicating a bearish sentiment as it’s below 50. Meanwhile, the MACD has remained neutral at 0, with its signal slightly bearish at -0.01. Furthermore, the 50-day Exponential Moving Average (EMA) is priced at $3.63, and the current copper price below it suggests a short-term bearish inclination.

The chart showcases a symmetrical triangle pattern, hinting at a price range between the upper boundary of $3.63 and the lower one at $3.55. Conclusively, the trend appears bearish below $3.63 but could pivot bullish above this threshold.

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