Precious Metals Fundamentals Supported by Central Bank Demand and Supply Limits
As of July 1, gold and silver have solid supply support in the form of central-bank buying, which has been increasing since, and relatively flat new gold and silver mine supplies over time. Major central banks continue to buy gold for diversification and to reduce debt overhangs. Central banks are also buying silver to a much smaller degree. Central bank support for the metals is separate from speculative sentiment in gold and silver investment funds.
New gold and silver mine production growth has been relatively low over the past several years. Gold mine production growth has been low over the past several years, as silver mine production growth over the past several years has also been relatively low. Silver and gold recycle supplies generally increase in an inflationary environment.
There is a large industrial demand component in the silver market; the use of silver in solar energy panels, electrical applications and EVs has been increasing as more renewable energy sources are developed. Gold and silver have investment demand for exchange-traded funds and bullion.
Central-bank demand, new gold and silver mine supplies and industrial silver demand help form the foundation for gold and silver fundamentals. Other factors, such as the rate of inflation and government debt levels, also help form the foundation for gold and silver fundamentals.
Gold Spot Dips to $3,973 – Triple Bottom Pattern Support on 2h
On the 2H time frame, Gold Spot at $3,973 is showing red continuation candles probing the triple bottom zone at approximately $3,959 from $4,142. There are lower highs on the red candles indicating distribution, but the asset is maintaining its support level at $3,959. RSI is currently below 45.
Volume profile shows the $3,959 to $3,973 as a new cluster of accumulations. The red 50MA line at $4,094 is acting as resistance. From $4,000 and below the market structure remains neutral to bearish while the price is testing the support at the triple bottom level. The wicks on price action is showing rejection off the support.
Trade Idea: Buy $3,973, targeting $4,044, with a stop at $3,959.
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See all Gold forecastsSilver Spot Dips to $57.52 – Blue Ascending Channel Test on 2h
Silver Spot falls to $57.52. The blue ascending channel is being tested on the 2H time frame. On the 2H time frame, Silver Spot at $57.52 is showing mixed candles probing the ascending channel floor at approximately $57.13 from $67.66. There are wicks on the green candles indicating absorption, but the asset is forming higher lows. RSI is near 45.
Volume profile shows the $57 to $58 as an emerging fair value area. The price area between the $58.83 to $60.41 are next in line to be tested as resistance. Above the channel floor the market structure remains neutral to bullish with higher lows. Buyers are participating in dips.
Trade Idea: Buy $57.52, targeting $58.83, with a stop at $56.50.
