Weekly forecast for gold and silver
- strong: Gold expected to end the week flat as bulls take a breather
- Hostage negotiations and talks about a possible ceasefire contrast with Israel’s recent advances in ground raids into northern Gaza
- neutral: Silver is trending lower, with a decline of more than 2% this week
- In this article’s analysis, chart pattern and the key support and resistance level. For more information, please see our comprehensive information. educational library
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Gold prices subdued despite Israeli ground air strikes and continued bombing
Gold is highly sensitive to geopolitical conflicts, so it’s no surprise that the safe-haven metal has posted an exponential rally of nearly 10% from its lows in recent weeks. However, the bullish momentum appears to have stalled this week as traders assess the commodity’s overbought status and closely monitor the latest negotiations over a possible ceasefire and the release of civilian hostages. .
Early signs suggest that talks are moving in the right direction, but Israel said Thursday night’s operation aimed at clearing landmines, destroying anti-tank defenses and gathering intelligence on Hamas positions It seems that they are making preparations.
Gold prices fell at the beginning of the week, but recovered as the week progressed. US yields are still rising, suggesting gold’s main driver is its safe-haven appeal. Price action reveals reluctance to trade above the $1985 level. This is evidenced by the long wick above each time the price trades above that level. This does not suggest that precious metals will start to be sold off, even if the RSI moves into overbought territory. In times of uncertainty, gold retains the potential for further upside.
$2010 appears as the next resistance level, followed by an all-time high near $2081.80. Additionally, gold is currently well above its 200 simple moving average (SMA). If the price trend pulls back from here, there is support at $1937, which is consistent with the 200 SMA.
Gold (XAG/USD) daily chart
Source: TradingView, Author richard snow
The weekly chart shows the magnitude of the movement in which an asset rises above a well-defined descending channel.
Gold (XAG/USD) weekly chart
Source: TradingView, Author richard snow
Silver is trending lower, down more than 2% this week
In a slightly different twist, silver’s price trends differ from gold’s. Gold traded sideways, while silver continued its weekly decline before attempting a late rally on Friday. Silver hit an all-time high a week ago after attempting to test the 50% Fibonacci retracement of the 2021-2022 significant decline at $23.83.
The 200 SMA came into play at the beginning of the week, limiting the price and forming the beginning of a short-term bearish move. This decline could find support ahead of the 38.2% Fib retracement at $22.35. Technically, this suggests a bearish outlook as silver is below the 200 SMA. However, as long as tensions in the Middle East remain high, the underlying situation remains a major risk to this bias.
Silver (XAG/USD) daily chart
Source: TradingView, Author richard snow
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The weekly silver chart shows that the long-term downtrend remains intact, in contrast to the massive impulse seen in gold.
Silver (XAG/USD) weekly chart
Source: TradingView, Author richard snow
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnow