How geopolitical tensions are influencing gold and silver markets
Explore the dramatic rise in cocoa, gold, and silver prices amidst ongoing global conflicts and trade tensions, and discover expert predictions on where these precious metals are headed as 2024 draws to a close.
Round-up
Year-to-date, the commodities market has seen some standout performance. Cocoa prices have surged by 180% to date, while precious metals like gold and silver have gained over 20%.
The rally in precious metals has been fuelled by persistent geopolitical uncertainties, including conflicts in Eastern Europe, the Middle East, and US-China trade relations, which have supported safe-haven flows. Notably, gold demand has been further supported by central banks—particularly in emerging markets such as China and India—actively diversifying their reserves to reduce reliance on the US dollar.
As 2024 enters its final two weeks, where might gold and silver prices be headed?
Asset class performance
Spot silver
Silver prices have exhibited a broader upward trend since March, characterised by a series of higher highs and higher lows. However, upward momentum has recently weakened, with the emergence of a minor head-and-shoulders pattern. This formation places the neckline at the critical $30 level which serves as a key support line for buyers to defend.
Notably, this level also aligns with a confluence of support from an ascending trendline and the 200-day moving average (MA).
A decisive break below the $30 level could open the door to a deeper pullback, potentially targeting US$27.80 as the next support. Conversely, holding above $30 would likely reinforce the broader bullish trend, positioning buyers to aim for the next resistance at $32.55, followed by its decade-high at the $34.87 level.
Silver daily chart
Spot gold
The $2720 level has proven to be a critical resistance for gold prices, with the previous two interactions triggering significant short-term bearish reversals. A move above this level would serve as a strong bullish confirmation, potentially opening the door for a move above its October 2024 high.
The broader uptrend remains intact, supported by gold prices trading above the daily Ichimoku Cloud and its 100-day MA, creating a support confluence near the $2610 level.
However, a break below the $2610 level could signal a potential bearish reversal, opening the door for a deeper pullback toward the next support level at $2531.
Gold daily chart
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