I observed that Friday’s reversal, following a significant decline since the start of this month, appears to be a technical bounce when evaluating the movements of gold and across various time frame chart patterns. This indicates that the selling trend may persist if both futures close the week below key support levels.
Since gold and silver futures tumbled on Thursday after several major central banks flagged caution over the inflationary effects of the Iran war, expectations have fueled for no interest rate cuts in the near-term– a scenario that bodes poorly for precious metals.
Undoubtedly, both precious metals experienced some relief from a drop in the dollar, which was headed for its first weekly loss in three weeks.
The greenback was outpaced by other major developed world currencies after several central banks flagged plans for interest rate hikes in the face of rising energy prices.
I observed that safe haven flows into gold were vastly overshadowed by a spike in the U.S. dollar and Treasury yields, as markets fretted over the inflationary effects of the conflict between the U.S.-Israel and Iran, which has turned multi-dimensional now as Israel is constantly bombing over Lebanon.
Israeli air raids have killed at least four people in southern Lebanon as dozens were reported killed across the war-battered country over the past two days, on this punishing front of the wider conflict launched by the United States and Israel against Iran that has embroiled the Middle East.
Now, Oil prices shot up to a near four-year high this week, especially after strikes on Middle Eastern energy infrastructure pointed to more supply disruptions.
I observed that despite rising risks of losing public support, both the U.S. President Donald Trump and Israeli Prime Minister Netanyahu look obsessed with war mania before the mid-term November election in the U.S. and the October election in Israel.
However, they have elevated the stagflation fear among the nations that have nothing to do with this war, experiencing a denting impact of elevated energy prices on their economy, and in such a scenario, most of the global central banks are going to make policy changes to lessen the denting impact of this war on their respective economies.
Undoubtedly, key drivers for maintaining bullish sentiments in precious metals remain absent in 2026 compared to 2025, as both precious metals have lost the war premium since the beginning of this month.
On Friday, oil prices fell, extending losses from the prior session after U.S. officials said Washington may soon lift sanctions on Iranian oil already at sea, freeing up more supplies.
Hope for some de-escalation in the U.S.-Israel war on Iran also weighed on crude, especially after Washington asked Israel to hold off on future attacks against Iran’s energy infrastructure.
I conclude that if some de-escalation starts appearing on the war front, it will definitely trigger selling in precious metals, and this de-escalation theme could take some definite shape this weekend, as President Trump makes critical decisions, especially on weekends.
Technical Levels to Watch
GOLD
In a weekly chart, started this week at $5,010, tested a weekly high at $5,049.40, and a weekly low at $4,505.31, and are trading at $4,727, trying to hold above the immediate support at the 20 EMA ($4,650), where 20 EMA refers to the 20-period Exponential Moving Average, a technical indicator showing the average price over the past 20 weeks, weighted more toward recent prices.
Undoubtedly, a weekly close below this support in gold futures today will indicate continuity of selling pressure during the next week.
In a daily chart, gold futures are trying to defend the significant support at the 100 EMA ($4,631). Here, 100 EMA stands for the 100-period Exponential Moving Average, which smooth price data to highlight trends. A close below this could push the futures to test the next support at the 200 EMA next week.
SILVER
In a weekly chart, silver futures are also trying to defend the immediate support at the 20 EMA ($73.301), despite testing a weekly low at $65.550, indicating elevated selling pressure at the current levels.
Undoubtedly, a weekly closing by silver futures below the immediate support at the 20 EMA in today’s session will indicate continuity of the selling spree next week too.
In a daily chart, silver futures are also trying to defend the significant support at the 100 EMA ($71.512), where a breakdown could accelerate the selling spree in silver futures to test the next support at the 200 EMA ($53.457).
Disclaimer: Readers are advised to take any position in gold and silver at their own risk, as this analysis is based only on observations.
