Precious metals extended their recovery for the third consecutive trading session, with and Futures continuing to trade higher after last week’s sharp rebound. Precious metals like Gold and Silver Futures prices continue to be high due to investors continuing to buy into recent weakness despite escalating Middle East tensions pushing oil prices higher and reinforcing expectations that the Federal Reserve could keep interest rates elevated.
Traders who followed our previous recommendation to buy Gold August Futures and Silver September Futures in the $3955 – $3965 range per ounce and $55.000 – $55.200 have already witnessed a strong rally, with all major upside targets achieved over the past three sessions.
During Wednesday’s US session, Gold August Futures climbed to around $4171.40 range per ounce while Silver September Futures rose to the $61.255 range, representing a gain of more than $200 per ounce and more than $6.200 from our recommended buying zone, respectively in Gold and Silver Futures prices. Gold and silver have also participated in the recovery, supported by improved market sentiment and broad based buying interest across the precious metals complex.
What is Driving the Current Rally?
Gold and silver have remained highly volatile over the past several sessions due to a combination of geopolitical developments and macroeconomic uncertainty. Renewed tensions in the Middle East have continued to support safe haven demand, while traders are also closely monitoring incoming US economic data and expectations surrounding future Federal Reserve policy.
Gold and Silver consolidated recent gains after rallying about 5% and 10% respectively over the previous three sessions, with investors weighing renewed geopolitical risks against the prospect that higher energy prices could keep inflation elevated and complicate the Federal Reserve’s policy outlook. The US and Iran showed little sign of returning to negotiations as hostilities intensified, while attacks on tankers transiting the Red Sea were reported for the first time since the conflict began in late February. Yemen’s Iran-backed Houthi movement claimed responsibility, raising fresh concerns over shipping through a key route for Saudi Arabian crude exports.
Recent fluctuations in the US dollar, Treasury yields, and changing interest rate expectations have added to market volatility. Every major economic release has triggered sharp intraday swings, making disciplined risk management increasingly important for traders.
Why Could Profit Booking Emerge Now?
After a strong three-session rally, gold is approaching an important resistance zone where traders who entered at lower levels may begin locking in profits. Such profit taking could trigger a short-term corrective move before the market establishes its next directional trend. While the broader outlook remains influenced by geopolitical risks and monetary policy expectations, short-term technical indicators suggest the market may be vulnerable to a temporary pullback following its recent sharp advance.
Intraday Trading Strategy – Gold August Futures
Sell Gold August Futures
Sell Zone: $4170 – 4180 per ounce
Stop Loss: As per your risk management
Targets:
Target 1: $4120
Target 2: $4100
Target 3: $4080
Intraday Trading Strategy – Silver September Futures
Sell Silver September Futures
Sell Zone: $61.200 – 61.400 range
Stop Loss: As per your risk management
Targets:
Target 1: $59.800
Target 2: $59.500
Target 3: $59.000
1. Our previous buy recommendation has delivered all expected targets, and traders may now consider booking profits on long positions.
2. From current levels, a short term correction driven by profit booking could provide an opportunity for intraday sellers.
3. However, given the elevated volatility caused by geopolitical headlines and expectations around US economic data and Federal Reserve policy, traders should manage position sizes carefully and use disciplined risk management.
4. Watch price action closely near the resistance zone.
5. If selling pressure increases, a short term downside swing toward the above targets may develop over the next few hours.
