A Gold & Silver Technical Update

Although the Fed met expectations by cutting rates on Wednesday, it roiled the markets by signaling a slower pace of rate cuts in the future.

Since the election, financial markets have been marked by heightened volatility and uncertainty as they absorb news about President-elect Donald Trump’s cabinet picks and potential economic policies. Adding to the complexity are geopolitical tensions and ongoing speculation about Fed policy. On Wednesday and into Thursday, markets across the board—from stocks and commodities to cryptocurrencies—experienced sharp sell-offs after the Fed adopted a more hawkish stance on interest rate cuts for 2025, citing persistently entrenched inflation.

Gold dropped 2.3% on Wednesday before recovering slightly on Thursday. This movement isn’t particularly surprising, as gold has been trading within a range since the U.S. presidential election, essentially oscillating within its established boundaries. There’s no cause for concern, as gold’s overall uptrend remains intact. Over the past year, gold has demonstrated a healthy and orderly growth pattern, steadily climbing through a series of consolidation phases or trading ranges in a stair-step manner. To confirm that this current consolidation phase has ended, I’m watching for a high-volume close above the $2,800 resistance level in COMEX futures.

To further validate that gold’s uptrend remains intact, examining its performance in euros can be insightful. Pricing gold in euros removes the impact of U.S. dollar fluctuations, offering a clearer perspective on its intrinsic strength. The chart confirms that gold is trading within a range of €2,400 to €2,600, which is an encouraging sign. A decisive close above the €2,600 resistance level will signal that gold’s bull market is ready to continue marching higher.