Gold and silver consolidating at technical levels awaiting next catalyst

Precious metals were higher on Thursday, with Silver travelling higher from $17.59 to a high of $17.93 while Gold prices climbed from $1,489.13 to $1,504.60. The gold and silver ratio travelled between 83.87 and 84.66 with a bullish bias as gold surges on. 

However, Gold for December delivery on Comex dropped $9.60, or 0.6%, to settle at $1,506.20 an ounce, while December Silver was losing 3.5 cents, or 0.2%, to $17.884 an ounce. The futures were marking their first losses for four sessions following the Federal Reserve earlier in the week disappointing the bears with a hawkish rate cut and unlikely to cut as immediately as in the next few months as first anticipated. A data-dependent Fed was not committing to further rate cuts and markets will now be looking closely to progress with US/Sino trade talks over the next few weeks. 

Trade talks are now critical again

In an article in the South China Morning Post, Michael Pillsbury, Donald Trump’s adviser on China, was reported saying that the president is ready to escalate the trade war if a deal is not agreed soon - a prospect that will kick off a risk-off environment, cap US stocks that are testing summer highs again and support precious metals higher, and likely force the hand of the Fed yet again. 

Gold levels

The bearish pin bar and the 4-HR 200 moving average is keeping the bulls in check with a series of failing bullish attempts higher in the 1,500s.  A 50% mean reversion of the late June swing lows to recent highs around 1470 guards the 19 July swing highs at 1,452.93. On the upside, the  4-HR 200 MA is located at 1,510 and is guarding 1,550 level is still the target to breach which then opens prospects for 1,590 as the 127.2% Fibo target area.

Silver levels

Technically, Silver remains confined within the breakout point between trendline support and resistance converging around18 the figure and the 21-daily moving average and daily pivot point. Bulls will look to a break towards the September highs of 19.64, which n the downside, bears can look to the 16.50s.