Gold and silver prices staged a powerful rally last week, driven by a softer US dollar, cooling rate hike expectations, and escalating fiscal risks in the United States. These factors combined to push precious metals sharply higher, setting the stage for a pivotal week ahead.
This week brings a dense calendar of US economic data and major events, with the core PCE inflation reading and the non-farm payroll benchmark revision taking center stage. However, the most significant market mover will be the Federal Reserve Chair's speech at the Jackson Hole symposium, scheduled for Friday at 10 PM Beijing time, which is expected to directly dictate the short-term direction for both gold and silver.
Given this backdrop, price action is likely to become less reliant on sentiment alone and instead become tightly anchored to core US inflation, employment, and growth data, alongside the Fed's latest policy signals.
Looking at the charts, the weekly timeframe shows a robust bullish candlestick pattern, with gold holding comfortably above its 5-week and 10-week moving averages. The moving averages are in a bullish alignment, the MACD histogram is expanding in positive territory, though the RSI has entered overbought conditions, warranting caution over potential pullbacks. The key weekly support at 4545 remains unbroken, confirming that the medium-term uptrend is still intact.
On the daily chart, consecutive bullish candles have formed, with the 5, 10, and 20-day moving averages stacked bullishly. Price is currently riding the upper Bollinger Band. While the MACD has maintained its bullish crossover, the histogram's momentum is fading. There is no sign of a reversal candle, suggesting this is a high-level consolidation within a broader uptrend. Daily support rests at 4527-4540, with resistance above at the 4665-4780 zone.
The 4-hour chart reveals a steady grind higher, with price following the 5-period moving average in a series of small bullish candles. The moving averages remain in a bullish alignment, indicating strength. However, a slight bearish divergence is emerging on the MACD, and the pattern of small-bodied candles suggests limited upside momentum, making it unwise to chase prices at current levels. The immediate downside focus is on the 4605-4600 area; holding this level keeps the bulls in control for another push higher. A decisive break below it would open the door for a deeper pullback toward 4560-4540.
On the hourly chart, alternating bullish and bearish candles point to increased intraday volatility and shakeouts. The European session is likely to focus on repairing technical indicators before choosing a clearer direction. For traders, the recommended strategy is to consider short positions in the 4655-4665 zone, with a stop loss above 4675, targeting 4630-4600 initially, and potentially 4560-4540 if support breaks.