Economic data from China and the United States came one after another, both of which were lower than market expectations, making the trend of precious metals unstable overnight. The dollar remained volatile and traded slightly higher around 92.60. Gold broke as high as around $1787.36, climbing to an one-week high to boost silver, which reached $23.86, showing a strong atmosphere to break through key resistance levels. Safe-haven buying poured into precious metals and silver bulls returned to investors.
The New York Fed's manufacturing index slowed to 18.3 in August from 43 a month earlier. The price acquisition index rose 6.6 points to 46, while the paid price index for purchases of raw materials fell slightly to 76.1, remaining high. The data show that inflationary pressures remain high. Indicators such as new orders, shipments and inventories show that manufacturing has continued to grow so far this month, but at a more cautious pace. At the same time, delivery times were extended and the New York Fed's manufacturing delivery time index climbed to the second highest level on record. Coupled with the increase in outstanding orders, it shows that manufacturers still have difficulties in meeting demand.
China's industrial production, retail and fixed asset investment growth in July were all lower than expected. China's National Bureau of Statistics announced that industrial output at and above the national scale increased by 6.4% year-on-year in July, down 1.9 percentage points from June and below the 7.9% growth expected by the market. Retail sales of consumer goods totaled 3.49 trillion yuan, up 8.5 per cent year-on-year, 3.6 percentage points lower than in June, 10.9 per cent higher than market expectations and 11.5 per cent lower than the growth forecast by economists surveyed by institutions. In the first seven months, national fixed asset investment reached 30.25 trillion yuan, an annual increase of 10.3%, which was lower than the 11.3% increase expected by the market.
Some Fed officials are considering ending asset purchases by mid-2022, and Wall Street is waiting for Chairman Colin Powell's speech and minutes of the Fed's interest rate meeting on Tuesday to look for further pilot signals.
The withdrawal of easing is seen as likely to be bad for precious metals because it could push up bond yields, but Chintan Karnani, head of research at Insignia Consultants, believes the Fed will not withdraw easing as quickly as market speculation, and falling growth rates also provide some support for gold.
Karnani noted that US retail sales figures for July had to be high to allay consumer concerns about being hit by inflation, so the lower-than-expected retail sales figures for July would push gold prices above $1836 to $1878.
The geopolitical risk of the collapse of the Afghan government has caused waves in US financial markets. U.S. president Joe Biden mentioned that the Afghan government is disintegrating faster than the U.S. government expected, but he insisted it was the right decision to end the 20-year war in Afghanistan. U.S. Senate Majority Leader Schumer also expressed support, saying Biden was right to end U. S. involvement in Afghanistan.
In a speech on the situation in Afghanistan on the 16th local time, Biden said that the situation in Afghanistan is "rapidly evolving" and that the White House national security team is "closely monitoring" the situation in Afghanistan. Biden said that the mission of U.S. troops in Afghanistan has never been for nation-building in Afghanistan, and that the only important national interest for the United States is to prevent terrorists from attacking the United States. Talking about his reasons for insisting on withdrawing troops from Afghanistan, Biden said that the agreement reached between former President Trump and the Taliban calls for the withdrawal of US troops from Afghanistan by May 1, 2021, and the Taliban's military strength has reached its peak. In order not to escalate the conflict, he had to make a decision to withdraw and firmly maintain his decision.
Faced with lower-than-expected US and Chinese data, political turmoil in Afghanistan and hawkish Fed rhetoric, markets continue to digest risk factors, while the dollar and precious metals both show a upward trend for Synchronize. After successfully testing the recent resistance level of 92.55 at the 20-day moving average, the dollar index will move towards the next resistance level of 92.80, which will be bearish for today's gold and silver prices.
FXEmpire analyst Vladimir Zernov noted that the gold / silver ratio continues to try to stabilize above the 75 level, and if the gold / silver ratio manages to stabilize above that level, it will rise to a recent high of 75.65, which will be bearish on silver.
With Treasury yields recently falling to new lows, traders should continue to keep an eye on the development of the US government bond market. Traders are buying US Treasuries and precious metals may also get support from safe-haven buying because of concerns about the spread of novel coronavirus's Delta variant and its impact on the global economy.
Zernov pointed out that the successful test of the resistance level of $24 will push silver to the next resistance level of $24.20. If silver rises above $24.20, it will move towards the resistance level of $24.50 near the 20-day moving average.
In terms of support, silver needs to settle below the support level of $23.50 in order to have a chance to gain downward momentum in the short term. The next support level is at $23.20, falling below the support level of $23.20, which will open the way for a test of $22.90.
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