Executive Summary

Precious metals enter the week of November 18-22, 2024, searching for stability after last week's sharp post-election selloff. Gold trades at $2,598 per ounce this Monday morning, attempting to hold support above the psychologically important $2,600 level after plummeting from October's record high of $2,790. Silver shows similar weakness at $30.45, well below its 12-year peak of $34.72 reached on October 22.

The week ahead features critical PMI data from major economies on Thursday and Friday, which will provide fresh insights into global economic health. Several Federal Reserve officials are scheduled to speak, offering the first substantive policy guidance since the election results. With the dollar index holding near two-year highs and equity markets surging, precious metals face continued headwinds but may find support if economic data disappoints or Fed officials maintain their dovish stance.

Current Market Position

Prices as of Monday, November 18, 2024 at 9:00 AM ET

Technical Analysis

Gold Technical Outlook

Gold's swift rejection from record highs has inflicted significant technical damage, with the metal breaking below its 50-day moving average ($2,648) for the first time since August. The RSI has plunged from overbought territory above 70 to a neutral 48, suggesting the correction may have further to run.

The immediate challenge is holding support at $2,575, which represents the 38.2% Fibonacci retracement of the rally from August lows to October highs. A break below this level would target the 200-day moving average near $2,485, though such a deep correction seems unlikely given the fundamental backdrop.

Silver Technical Outlook

Silver's correction has been more severe in percentage terms, reflecting its higher beta nature. The metal has surrendered its entire October rally and is testing critical support at the $30 psychological level. The 50-day moving average at $31.20 now acts as resistance.

Technical indicators are deeply oversold, with the RSI at 35 suggesting a bounce may be imminent. However, the trend structure has turned negative with a series of lower highs and lower lows established since the October 22 peak.

Week Ahead Calendar

Trading Scenarios

Key Themes for the Week

Post-Election Market Dynamics

The precious metals market continues to digest the implications of Donald Trump's election victory. The initial reaction has been decisively negative for gold and silver, with both metals experiencing significant selling pressure as risk-on sentiment dominates. The dollar's surge to two-year highs presents a formidable headwind, while soaring equity markets and cryptocurrency prices suggest investors are rotating out of traditional safe havens.

Federal Reserve Communication

Wednesday's FOMC minutes from the November 6-7 meeting will be scrutinized for any hints about the Fed's reaction function to the election outcome. More importantly, Governor Waller's speech on Tuesday represents the first opportunity for a Fed official to provide substantive guidance post-election. Markets will be listening closely for any signals about the December meeting, where a 25-basis point cut is still priced in despite the recent dollar strength.

Global Economic Health Check

Thursday's PMI releases across major economies will offer a comprehensive snapshot of global economic momentum heading into year-end. With manufacturing sectors struggling in Europe and China, any further deterioration could revive safe-haven demand. Conversely, strong readings would reinforce the risk-on narrative pressuring precious metals.

Week Ahead Outlook

The week ahead represents a critical juncture for precious metals as markets balance post-election exuberance against fundamental realities. While near-term sentiment clearly favors risk assets over traditional safe havens, the medium-term case for gold and silver remains intact given fiscal trajectory concerns and geopolitical uncertainties.

Technical damage needs repair before sustainable rallies can develop, making the $2,575-$2,600 zone critical for gold and $30 for silver. Patient investors may find current levels attractive for accumulation, particularly if economic data begins to disappoint elevated expectations.

The contrarian in us notes that positioning has shifted dramatically bearish in just two weeks, often a precursor to sharp reversals. However, fighting the trend remains dangerous until clear catalysts emerge. This week's data and Fed communication could provide those catalysts, making it essential to monitor developments closely.