Gold, Silver Outlook: Pullback or Trend Reversal?

Metals-Frame 13
Razam 125x125
By :  ,  Market Analyst

Key Events

  • Gold pulled back 60 points after falling short of the critical $2800 mark.
  • Silver is retesting the significant May 2024 high support at $32.50.
  • A tight US presidential race is only 5 days away.
  • Middle East conflicts diverge from ceasefire deals.
  • US Non-Farm Payrolls and Fed rate anticipation.

As we approach the US elections, balance employment and inflation risks to the Fed’s easing cycle, and weigh geopolitical factors, momentum on safe-haven assets appears overstretched.

Clarity with the coming US non-farm payroll indicator, US elections, and FOMC meeting may ease off uncertainty risks from the gold chart, leaving the geo tensions in the background.

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The key question now is whether this recent pullback in both precious metals is enough to recharge momentum for a continuation of the primary trend. Volatility can be expected following the non-farm payroll results today, as the markets are ready to price in the FOMC meeting tone for next week following the US election volatility.

Gold Outlook: Daily Time Frame – Log Scale

Gold, Silver Outlook: XAUUSD_2024-11-01_14-10-41

Source: Tradingview

The recent 60-point pullback in gold from the $2790 high created a daily bearish engulfing candlestick pattern, accompanied by an RSI dip below its moving average. However, considering ongoing fundamental and geopolitical uncertainties, the potential for an uptrend remains viable above $2800, with possible extensions towards $2890 and $3050.

On the downside, a break below the recent low of $2730 could extend declines to support levels at $2710 and $2685.

Silver Outlook: Daily Time Frame – Log Scale

Gold, Silver Outlook: XAGUSD_2024-11-01_14-42-57

Source: Tradingview

Unlike the gold chart, silver is reflecting potential bullish continuation signals, aligning with the $32.50 support level (May 2024 high). This includes the RSI holding above its neutral 50 level, and a pullback to the 0.272 Fibonacci retracement level of the uptrend from the August 2024 low of $26.45 to the October 2024 high of $34.87.

A decisive close below $32.50 could extend the pullback to $31.50 and $30.70. On the upside, a close above $35 would support a bullish continuation toward $36 and $37 respectively.

— Written by Razan Hilal, CMT – on X: @Rh_waves

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