Richard Snow, a strategist at DailyFX, stated on Monday (October 30th) that the bullish trend of gold has cooled down, but the potential for a strong upward trend still exists.
He said, "Gold is highly sensitive to geopolitical conflicts, so it is not surprising that this safe haven metal has shown an exponential rise in recent weeks, with a low point increase of nearly 10%
However, Richard Snow stated that this momentum seems to have stalled this week as traders assess the overbought situation of the goods and "closely monitor the latest negotiations surrounding a possible ceasefire and the release of civilian hostages".
He pointed out that gold prices fell at the beginning of last week, but will rebound over time. "The yield of US treasury bond bonds is still high, indicating that the main driving force of gold is its risk aversion attraction."
Richard Snow pointed out, "The price trend indicates that people are unwilling to trade at levels above $1985, as evidenced by the long up hatches on the technical chart every time the trading price exceeds that level
Richard Snow stated that although there may be signs of overbuying in the gold market, where investors may be chasing up too much, this does not mean that gold prices will rapidly decline. When market uncertainty increases, investors may still seek safety, and gold is usually seen as a relatively safe choice in such situations. Therefore, even if RSI indicators indicate that the market may overheat, gold prices are still expected to maintain an upward trend during uncertain periods, rather than immediately falling significantly.
The 2010 US dollar seems to be the next resistance level, followed by a historical high of around 2081.80 US dollars, and gold prices are currently far above the 200 day Simple Moving Average (SMA). If the price trend rebounds from here, the support level will appear at 1937 US dollars, which coincides with the 200 day SMA
When it comes to silver, Richard Snow pointed out that its trend has changed from gold and is showing a downward trend, with a decline of over 2% this week. In a relatively unusual situation, the price trend of silver is different from that of gold, "Richard Snow added." Although gold trading remained flat, silver continued to decline weekly but attempted to rise late last Friday
Richard Snow stated that silver peaked about a week ago after attempting to test the 50% Fibonacci retracement of its main decline from 2021 to 2022 at $23.83.
He said, "At the beginning of this week, the 200 day simple moving average began to come into play, limiting prices and forming a short-term bearish trend. Silver may find support before the 38.2% Fibonacci pullback to $22.35
Technically speaking, silver is below the 200 day simple moving average, indicating a bearish outlook. "Richard Snow warned," As long as the situation in the Middle East remains highly tense, this fundamental risk may have an impact on the market
He concluded, "The silver weekly chart shows that the long-term downward trend is still intact, in stark contrast to the huge driving force of gold
