empty
25.10.2024 03:03 PM
USD versus precious metals: correction as excuse to add more long positions

Traders have to deal with mixed trends for market instruments on Friday. The US dollar and precious metal have reached key support levels today.

Silver's price, in the first half of today's trading session, reached 33.05, testing the strong short-term support level of 33.12 (the 200-period moving average on the 1-hour chart). The XAU/USD pair, reflecting gold's price movement, hit 2,722.00 by the time of this article, after testing a strong short-term support level (the 144-period moving average on the 1-hour chart).

This image is no longer relevant

Economists believe that gold and silver prices have dipped due to upbeat recent US macroeconomic data. Preliminary data from yesterday showed an increase in October's S&P Global Manufacturing PMI in the US from 47.3 to 47.8 (against a forecast of 47.5) and the Services PMI from 55.2 to 55.3 (forecasted at 55.0).

The US Labor Department reported that initial jobless claims for the week ending October 18 fell to 227,000 from 242,000 previously, while continuing unemployment claims (for the week ending October 11) dropped to 1.867 million from 1.869 million the prior week.

Additionally, Thursday's Census Bureau data on home sales, an important indicator of the US real estate market, showed a 4.1% increase in new home sales in September following a -2.3% decline a month ago.

Economists predict consumer spending growth of +2.4% in 2024 compared to +2.2% last year. The US economy grew by +3.0% in the second quarter of 2024, with overall GDP growth expected to be +2.7% for the year. Retail sales in September inched up by +0.1%, while industrial production increased by +0.8%. Overall, this positive data is bullish to the US dollar.

This image is no longer relevant

However, it may be premature to bet on a further and deeper decline in precious metal prices, given the continued high demand amid global geopolitical tensions.

In our view, the current price declines for silver and gold are part of a correction following their impressive bullish rally. So, it makes sense to plan long positions at about support levels of 2,719.00, 2,710.00, 2,700.00 (for gold) and 33.12, 33.00 (for silver).

This image is no longer relevant

Today, market participants will assess US macroeconomic data scheduled for release at 12:30 (GMT) and 14:00. According to the consensus, durable goods orders sank to -1.1% in September from 0% previously, and excluding transportation, to -0.1% from 0.5% in the previous month. Additionally, the University of Michigan consumer confidence index for October is expected to have decreased to 69.0 from 70.1 in September, with 5-year consumer inflation expectations dropping from 3.1% to 3.0%.

If this data proves even weaker than expected, the US dollar will weaken in response, along with end-of-week profit-taking, potentially leading to a new bullish sequence in precious metal prices.

Jurij Tolin,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

The Japanese yen maintains its bullish bias, driven by expectations that the Bank of Japan will continue raising interest rates this year. A strong increase in wages could boost consumer

Irina Yanina 10:31 2025-03-20 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on March 20. Review of Yesterday's Forex Trades

The price test at 149.63 occurred when the MACD indicator had just begun moving downward from the zero mark, confirming a valid entry point for selling the dollar

Jakub Novak 08:08 2025-03-20 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on March 20. Review of Yesterday's Forex Trades

The price test at 1.2978 occurred when the MACD indicator moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the pound

Jakub Novak 08:07 2025-03-20 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on March 20. Review of Yesterday's Forex Trades

The price test at 1.0911 occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason

Jakub Novak 08:07 2025-03-20 UTC+2

Intraday Strategies for Beginner Traders on March 20

The euro and the pound managed to withstand the pressure they faced before the Federal Reserve meeting and continued to rise immediately after. It was announced that the Federal Open

Miroslaw Bawulski 07:33 2025-03-20 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on March 19th (U.S. Session)

The test of the 149.59 level coincided with the MACD indicator just starting to move downward from the zero mark, confirming a valid entry point for selling the US dollar

Jakub Novak 18:13 2025-03-19 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on March 19th (U.S. Session)

The test of the 1.2975 level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downward potential. For this reason

Jakub Novak 18:07 2025-03-19 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on March 19th (U.S. Session)

The test of the 1.0920 level coincided with the MACD indicator moving significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell

Jakub Novak 18:05 2025-03-19 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on March 19. Review of Yesterday's Forex Trades

The test of the 149.86 price level occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's upside potential. For this reason

Jakub Novak 08:01 2025-03-19 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on March 19. Review of Yesterday's Forex Trades

The test of the 1.2980 price level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downside potential. For this reason

Jakub Novak 08:01 2025-03-19 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.