Gold Rebounds, But Bearish Trend Remains; Silver Demand Expected to Drive Prices
The gold price is rebounding from its recent low of $4112, but it still trades below both moving averages and a broader bearish trendline. This means the bigger picture remains bearish.
Despite this, major central banks are continuing to diversify their reserves by purchasing gold. In fact, emerging-market central banks have been buying gold in an effort to reduce their exposure to the U.S. dollar. Gold ETFs have also seen inflows over the past eleven weeks.
The labor report for September is expected to be released soon, and analysts predict a modest 90,000 new jobs with no change in the unemployment rate of 4.1%. However, some Federal Reserve officials may consider another interest rate hike if this scenario plays out.
Industrially, silver demand will continue to support its price despite interest rate hikes and a strengthening dollar. The Silver Institute predicts that the market will be in a structural deficit through 2026 of approximately 67 million ounces due to ample industrial demand and declining mine and processing supply.