Have Gold and Silver Finally Reached Their Bottoms? | Credit: Derek Fenech
Share
Key Takeaways
Gold and Silver have fallen by over 10% since their all-time highs.
The SP500 and NASDAQ both reached new all-time highs today.
Will traditional assets continue to rally with a Fed rate cut today?
Gold and Silver have taken notable hits recently, dropping over 10% from their all-time highs, while major U.S. stock indices, such as the S&P 500 and NASDAQ, continue to surge.
A possible rate cut at today’s FOMC meeting could cause the stock market and precious metals to bounce.
Let’s examine why the Gold and Silver rates are rising today, and if there is any correlation to the bullish stock market.
Gold Price Bounces
The Gold price decreased by 11% after reaching its all-time high of $4,381 on October 20. The downward movement led to a low of $3,886 on October 28, approaching its monthly low.
Gold bounced afterward and is breaking out from its diagonal resistance trend line, a sign that the correction may have ended.
Get These Top Crypto Casino Offers Now!
Sponsored
Disclosure
We sometimes use affiliate links in our content, when clicking on those we might receive a commission at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
While Gold has not yet closed above its diagonal resistance, it has moved way above it, rising above $4,000.
If the upward movement continues, the primary resistance will be at $4,130, created by the 0.5 Fibonacci retracement resistance level and a horizontal resistance area.
The wave count also suggests that Gold will not continue to fall. The decline since the high is an A-B-C corrective structure (black), with wave C being 0.618 times longer than wave A.
Momentum indicators show some bullish signs. The Moving Average Convergence/Divergence (MACD) made a bullish cross (black circle), and the Relative Strength Index (RSI) is at 50.
So, the Gold price will likely rally toward at least $4,130. Whether it breaks out will be key to determining whether the upward movement is impulsive or corrective, and whether another all-time high for gold is likely this year.
Why is Silver Going Up?
The Silver price chart shows a 16% price drop after its all-time high, culminating with a low of $45.53 before bouncing.
However, its future outlook is more bearish than Gold because of the shape of the preceding downward movement.
While Gold’s decline is an A-B-C structure (black), Silver has completed a five-wave downward movement (red), indicating an impulsive decline.
While a bullish divergence in the MACD (orange) preceded the upward movement, the bounce could be corrective because of the previous five-wave decline.
Although Silver has broken out from a diagonal resistance today, the most likely future outlook is an increase toward the $50-$51 resistance, followed by another decline.
Why is The Stock Market Up Today?
The S&P500 has rallied nearly without any retracement since April 7. A 43% rally led to a new all-time high price of $6,017 today.
In addition, bearish divergences are developing in the RSI and MACD. However, it is worth mentioning that similar bearish divergences did not affect the price previously.
As a result, there is insufficient data to suggest that the S&P500 will break down from the channel.
NASDAQ has a more bullish-looking chart, since the price has already broken out from its ascending parallel channel.
So, there are no bearish signs besides the bearish divergence in the RSI, which is insufficient to predict a bearish trend reversal.
With the upcoming FOMC meeting today and another expected rate cut, the stock market is likely to continue its upward trend, and Gold and Silver could follow suit.
Conclusion
Gold and Silver have shown signs of recovery after steep corrections, with technical indicators hinting at short-term upside potential.
Meanwhile, the stock market is resilient, supported by investor optimism ahead of potential rate cuts.
If today’s FOMC meeting leads to a rate cut, Gold and Silver may extend their rallies into the coming weeks.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
