Divergent trends and price forecasts for international gold and silver prices

Precious metals have recently shown volatile and weak performance, mainly due to three factors.

First, the US July non-farm payroll data fell below expectations, increasing market expectations for more accommodative monetary policy from the Federal Reserve this year. This also heightened market expectations of a US recession. The logic of the Fed cutting interest rates is difficult to counter the logic of recession expectations, leading to continued market pessimism and a bearish impact on the precious metals market, with a greater impact on silver.

Second, the Bank of Japan's continued interest rate hikes have caused the yen to appreciate, reversing yen carry trades, causing a general decline in global stock markets, and exacerbating market pessimism. The yen's appreciation will directly impact precious metal prices.

Third, changes in the macroeconomic environment may lead to a liquidity crisis, negatively impacting precious metal prices. The withdrawal of long positions has a bearish impact on precious metal prices, while recession expectations have a strong negative impact on the price of silver, which has a stronger industrial component, hence its decline is far greater than that of gold.

Concerns about a US recession are rising.

Recently, the US economy has slowed, the job market has weakened, inflation has fallen below expectations, financial markets have been volatile, and other economic indicators have also been weak. Although US economic data has weakened, the overall economic situation has not weakened significantly, and US consumer spending has not declined significantly. The Federal Reserve will subsequently cut interest rates to stimulate economic recovery. Therefore, while the US economy is slowing and recessionary concerns are intensifying, the likelihood of a true recession or a "hard landing" remains low.

Regarding market rumors of the Fed cutting interest rates ahead of schedule, I believe that based on the current trajectory of the US economy and statements from Fed officials, while the US economy has weakened, it has not weakened significantly. Inflation has fallen, but it is still some distance from the Fed's policy target. Fed officials have downplayed the impact of a single non-farm payroll data report, emphasizing the need to observe the sustained impact of multiple data points before deciding on a rate cut. Therefore, based on the current economic trajectory and statements from Fed officials, the likelihood of the Fed cutting interest rates ahead of schedule is low.

The current market expectation of the Fed cutting interest rates this year is overly aggressive. It is expected that the Fed will likely cut interest rates by 75 to 100 basis points this year, with one rate cut each in September, November, and December.

The medium-to-long-term bullish trend for gold prices may remain unchanged.

Recently, gold's technical indicators have been dragged down, and silver's technical indicators have continued a weak trend.

The London gold price has seen significant volatility at high levels, and the technical indicators show a continued range-bound adjustment. Support levels to watch are $2365-$2345 per ounce, with $2300-$2277 per ounce remaining strong support for the second half of the year, and the likelihood of a break below is low. Resistance above continues to be watched at $2483.7 per ounce.

For international silver prices, support levels to watch are $26-$25.5 per ounce. Resistance above continues to be watched at $28.5 per ounce. If it breaks through or tests the $30 per ounce resistance level, the $31.7 per ounce resistance level can still be expected.

From the price trend of precious metals, the price trends of gold and silver have diverged, and the weak trend of silver prices is unlikely to end soon. The strengthening yen and macroeconomic changes such as recession expectations have impacted all commodities. The London gold price has been dragged down and adjusted, but its overall performance remains resilient, and the expected decline is limited.

Silver prices have been significantly adjusted due to recession expectations. Until recessionary trading ends, silver prices are unlikely to see a short-term rebound from the recent weak trend. In the medium to long term, it will follow the upward trend of gold prices. In the medium to long term, factors such as increased monetary attributes and a shift towards accommodative policies remain positive influences, while safe-haven demand, excess liquidity, and global central bank gold purchases remain positive influences. The medium-to-long-term bullish trend for precious metal prices may remain unchanged.