Gold shot higher in overnight trade. At the end of last week, gold was testing resistance at the upper end of a trading range which has been building for three months. The top end came in around $3,450, and gold sliced through this in the thinly traded Asian Pacific session to come within $10 of its April all-time high of $3,500.
Source: TN Trader
Gold has made steady upside progress over the last two weeks or so, helped by some softening in the US dollar as traders assess the likelihood of a Fed rate cut this month. According to the CME’s FedWatch Tool, there’s currently a 90% chance of a 25-basis point cut as the Fed concludes its monetary policy meeting on 17th September. But it’s worth remembering that there are some significant data releases due before then.
This includes Friday’s Non-Farm Payroll report, while there are further inflation updates due, with CPI and PPI out next week. If, for instance, this week’s jobs report was to surprise to the upside, that could upend the probability of a rate cut later this month.
Meanwhile, silver outperformed this morning and surged above $40 per ounce to hit its highest level since September 2011. Silver bulls now have the all-time high from April 2011, just shy of $50 per ounce, in their sights.
The big question now is whether silver can head directly to this level, or if it heeds to consolidate first. Alternatively, could current levels mark the high for now?
