Gold and Silver Shine Amid Fed Hike Uncertainty

The recent Federal Reserve rate hike had a mixed impact on gold and silver. Despite rising interest rates, which typically negatively affect precious metals, both gold and silver held up well. Gold gained 0.8% over the past week, while silver rose by a more impressive 3.2%. The resilience of these metals can be attributed to ongoing concerns about inflation, debt, and geopolitical tensions.

However, not all sectors were positively affected. The gold stocks, as represented by the Gold Bugs Index (HUI) and TSX Gold Index (TGD), saw declines of 1.0% and 0.6%, respectively. This suggests that while investors may be holding onto gold and silver, they are not necessarily translating this into buying shares in mining companies.

The US dollar index gained 1.1% over the week but left a bearish shooting star pattern on its chart. For this sign to be realized, downside follow-through is essential in the coming days. The currencies, except for the Japanese yen, were also bullish, particularly after the Bank of Japan's interest rate hike.

The technical analysis suggests that gold and silver are forming bottom patterns. To confirm a breakout, they need to rise above $4,600 and $67, respectively. If these levels are reached, new highs could be achieved for both metals, with gold potentially hitting $5,200 and silver reaching $106.