As with crude, gold prices are looking to the US GDP report for direction cues. A pickup in output growth unchecked by the Fed after policymakers clearly lurched to the dovish side of the policy spectrum earlier this week promises to boost inflation expectations, boosting demand for the yellow metal as a store-of-value hedge. Needless to say, a disappointing outcome would reverse this dynamic, weighing on prices. In fact, given gold’s already considerable advance over the last two days, a print squarely in line with expectations may also produce a bit of corrective downside amid profit-taking.
Sizing up the chart setup, prices continue to move higher after taking out horizontal resistance at 1677.05 as well as a falling trend line established from early September, with the bulls still aiming to challenge 1750.87. Near-term support stands at the $1700/oz figure, a psychological threshold reinforced by former resistance at the top of a minor channel set from early January.
Silver: Like gold, silver is looking to the US GDP report and the outcome’s implications for inflation expectations as the main driver of price action into the week-end. Prices continue to work their way higher through congested support-turned-resistance levels, with a break past 33.30 exposing 34.03 as the next barrier and ultimately threatening the late October top at 35.30. The 33.30 mark has been recast as support.
