Gold and Silver Rally Amid Volatility

The past few days have seen a relatively quiet market, with fluctuations that no longer reach the dramatic highs and lows of earlier weeks where daily movements of several dozen dollars were common. The reason can be traced to the Thanksgiving holiday in the United States, which typically leads to lower trading volumes. As a result, traders are advised to adopt a more cautious approach. On Thursday, gold oscillated within the range of 2620 to 2649, first rising during the Asian and European trading sessions and then experiencing a downward trend during the US trading hours. Although short positions were initiated, the price movements lacked substantial breadth, relegating them to mere insignificance. Silver also displayed a rebound without breaking below the 29.5 level, further indicating its mild oscillatory behavior. Meanwhile, oil fluctuated around the support level of 68, with expectations for a rebound against short positions, although this recovery would likely require some time to materialize. In the futures market, after the downturn on Wednesday, gold, silver, and other commodities witnessed a brief bout of recovery. However, despite the reprieve from decreased prices, the upside seems limited, with predictions leaning toward a continued bearish trend characterized by low-level oscillations.

The geopolitical landscape has further added to market uncertainty, particularly in the Middle East, where ceasefire agreements seem to be in constant flux—one-moment affirming agreements, the next revoking them altogether. This unpredictability has made gold’s role as a haven both momentarily tangible and fleeting, resulting in significant uncertainty for gold prices. This trading day, occurring on the day after Thanksgiving, also known as Black Friday in the US, often exhibits volatility that may surpass that of the previous day, creating a need for prudence among traders.

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As the dollar reflects an ongoing weakening trend this week and appears set for adjustments around the 105 mark, there is an implication that gold may struggle to experience significant downward movement. A review of this week's gold price action reveals that after Monday's considerable drop, the market established a clear declining trajectory, suggesting a peak around 2721. On Tuesday, a minor rebound occurred at the 2605 level, but the prevailing trend remained downward. Similar patterns characterized Wednesday and Thursday, where brief rallies were met with renewed selling pressure. Overall, gold exhibited only a substantial decline on Monday, while subsequent days saw limited price movements and diminished bearish momentum, complicating any clear directional trading strategy. As uncertainty looms regarding gold's role as an investment haven, the market remains cautious, leaving traders with limited assurances for significant price shifts either way. By Friday, gold was likely still in a consolidative phase, yet the day started with a slight decline that gave way to a rise back toward 2662, breaking the previous day's high. This suggests a stronger market sentiment than in recent days, where traders should refrain from making arbitrary short positions and instead focus on short-term dynamics. Based on current momentum, one could be looking towards 2665 or 2675 as significant resistance levels.

Shifting the focus to silver, the decline to the 29.5 support level should discourage overly bearish sentiment. This past week's trading saw some difficulty in establishing operational ranges, but as of Friday morning, silver managed to surge up to 30.5, effectively revisiting its previous starting point. Thus, in a short-term lens, a position around 30.6 could be considered for short positions, observing potential retracement toward 30, though traders should be wary of assuming a pronounced downward movement. It is anticipated that any substantial shifts for silver may not manifest until December or January.

In the crude oil segment, trading on Wednesday and Thursday exhibited limited fluctuation, with a critical focus on whether the support at 68 would hold. Currently, that support remains intact following a series of oscillations, with upward movements peaking at 70.2 and declines bottoming out at 68, with a closing price around 68.6. While oil's performance remains tepid, the critical point lies in recognizing that as long as prices stay above 68, significant downward pressure is unlikely. For today, should the 68 support level remain unbroken, maintaining previous long positions seems prudent, monitoring the strength of further rebounds. If upward momentum proves substantial, traders may target levels of 70 and beyond, possibly testing the high at 71.