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Silver Is Now Supporting Gold Prices

Commentaries & Views

Yesterday’s close: Settled at 1423.3, up 12.1

Fundamentals: Silver achieved $16 for first time since February and it’s finally doing some of the heavy lifting for the precious metal complex. Silver severely lagged Gold’s June rally and now that Gold is consolidating, it needs Silver to keep buyers on board. Today is a perfect example; Philly Fed Manufacturing blew out expectations causing the 30-year Bond to lose nearly a point. Gold which was already off its overnight high of 1431.9 (separate technical story) only bounced around in $7 range post-Philly thus far and has arguably held ground extremely well and credit that to Silver. Still, we are not saying everything is in the clear fundamentally or technically simply because of Silver; we have concerns that the Fed’s rate cut path is too highly priced to reality and this could be a headwind for Gold. For now, for this hour, the precious metals complex is winning the battle. NY Fed President Williams speaks at 1:15 pm CT.

Technicals: Gold remains range bound and overnight was the fifth and latest failure at our major three-star resistance at 1432.9. Failing to settle out above here has kept our Bias more Neutral than Bullish. After pulling back by more than 1%, it is so far holding a constructive floor in a higher volatility consolidation. First key support comes in at 1415.6-1416.6 and this aligns with today’s low; holding this level and settling above the 1420.2-1421.5 pivot is constructive. A move below here though must hold 1408-1409.

Bias: Neutral/Bullish

Resistance: 1432.9***, 1484.5***

Pivot: 1420.2-1421.5

Support: 1415.6-1416.6**, 1408-1409***, 1400.5-1403.5**

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