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Analyst: If gold and silver prices fall back after the release of non-agricultural data, it will be a buying opportunity

2024-07-05

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Christopher Lewis, market analyst at FX Empire, believes that if gold and silver prices fall after tomorrow's non-farm payrolls report, traders should view it as a buying opportunity.

Christopher Lewis pointed out that Friday's non-farm payrolls report will have a significant impact on the trend of gold prices. "Because of this, frankly, I expect prices to see a big correction. I think this upward trend will continue for the foreseeable future. There are too many factors that favor gold."

Christopher Lewis said: "The first one is of course the major central banks, Russia, China and India, and many other central banks are buying gold. Western countries, especially the United States, are borrowing a lot, which will eventually devalue the dollar. So in the long run, this does drive gold prices higher. Of course, there are a lot of geopolitical risks."

He added, "Fourth reason, frankly, is that we are in an upward trend."

Christopher Lewis said the gold market has been "de-bubbling some bubbles" for months, but he believes that "prices will eventually seek to reach the $2,400 level and then possibly break through that level."

At this point in time

Christopher Lewis said, "In my opinion, a pullback to the 50-day moving average or a little lower, the $2,300 level, would be an excellent entry point. I have no interest in shorting gold at this point in time, even if it falls below $2,300, I just want to buy at a lower price."

Speaking of silver, silver fluctuated up and down in Thursday's trading, but he did not read too much into the trend due to low liquidity due to the US holiday. Christopher Lewis said he will pay close attention to the performance of silver after the release of non-farm payrolls data, and like gold, he hopes that silver will pull back.

"Silver could fall from here, but I think it will ultimately be a buying opportunity," he said. "The $30 level will be the first support, but below that is the 50-day moving average, which is near $29.25 or so."

"Whether silver will go all the way down remains to be seen, but I do think the situation right now is that the dollar and the reaction to the jobs data will be key," said Christopher Lewis. "If the jobs data is better than expected, that could strengthen the dollar, which could do a good job for silver, at least temporarily. But Wall Street is pretty convinced, especially after Jerome Powell's press conference yesterday, that a rate cut is coming, so they will continue to try to push the commodity higher."

Lewis said it's important to recognize that the dollar will largely determine the near-term direction of silver prices.

"I don't think there's anything magical about this market other than it's priced in dollars," he said. So, we'll just have to wait and see. If silver turns around and breaks below $28.50, then the market could really start to reverse, and I don't think that's going to happen on Friday." We are more likely to see $32 being challenged in the coming weeks than a breakdown like this one.”

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Analyst: If gold and silver prices fall back after the release of non-agricultural data, it will be a buying opportunity

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