After climbing for four consecutive quarters, Gold prices reached a new all-time high in October 2024, peaking at US$2,790/oz. However, the momentum faltered in Q4, with Gold giving back all its quarterly gains to close the quarter marginally lower by US$9.79/oz, or 0.37%. As we transition into Q1 2025, our proprietary system signals a shift in market dynamics, with Gold bears attempting to wrest control from the bulls. This suggests a potential further pullback in prices during the quarter. Bears are eyeing the US$2,537/oz level—the low from Q4 2024—as a key test of demand strength. However, this pullback is expected to be brief and temporary, as the long-term cyclical uptrend for Gold remains intact.
Similarly, Silver prices saw a marked decline in Q4, dropping 7.21%, or US$2.24/oz, after four consecutive quarterly increases. Looking ahead to Q1 2025, our analysis indicates further pressure on Silver, with bears targeting the US$26.45/oz level, which represents the low from H2 2024. While early signs suggest the current bull trend for Silver may be stalling, there is no definitive evidence of a shift to a bear market yet.
Our system suggests that if the broader precious metals market continues its downtrend, Silver’s downside risk may surpass Gold’s in percentage terms this quarter.
Platinum prices also retreated in Q4, declining by US$78.36/oz, or 7.99%. Despite this, Platinum has stayed within its well-established trading range of US$850/oz to US$1,100/oz, a band that has persisted since Q3 2021. As we enter Q1 2025, our system forecasts continued range-bound trading for Platinum, albeit with a downside bias. Bears are likely to test the US$850/oz level, the lower boundary of this range.
For additional insights or inquiries regarding our Q1 2025 outlook for the precious metals market, please don’t hesitate to reach out. We are always here to support you and wish you a successful trading quarter!
Precious metal prices, like Gold, Silver, and Platinum, often oscillate between trending and cyclical phases, creating distinct opportunities and challenges for traders. Understanding these dynamics is crucial for aligning your strategy with the prevailing market environment. Here’s an in-depth look at how these phases operate and how traders can use them to their advantage.
Trending Phases
In trending phases, precious metal prices move in a clear and sustained direction—upward in bullish trends or downward in bearish trends. These movements are influenced by economic details, including:
- Interest Rates: Changes in central bank policies, such as rate hikes or cuts, directly impact precious metals, which are non-yielding assets.
- Macroeconomic Data: Inflation reports, employment data and GDP growth often set the tone for the metals market.
- Geopolitical Events: Global uncertainty, like wars or trade disputes, tends to favor safe-haven assets like gold.
While economic factors influence market sentiment, price movement ultimately depends on the underlying buying or selling action. These phases vary in sustainability and depending on the horizon of the trade, different metrics should be used to derive the outlook.
Cyclical Phases
Cyclical, or range-bound, phases occur when precious metal prices fluctuate between well-defined support and resistance levels. These phases often suggest a balance between buyers and sellers, leading to indecision in the market. Key characteristics of cyclical markets include:
- Repetitive Movements: Prices oscillate within a specific range, often without a clear direction.
- Market Consolidation: These periods are often precursors to a breakout in either direction.
- Neutral Bias: There is no strong preference for upward or downward movements, making directional strategies less effective.
Trading a trending strategy in a cyclical market can lead to losses, as the lack of directional momentum results in false signals. Instead, range-bound strategies are better suited for these phases.
Insights from the GSC Morning Call
At GSC Morning Call, we provide daily insights to help traders navigate these phases effectively. Our analysis includes:
- Identifying Market Phases: Determine whether the day’s price action is likely to be trending or cyclical.
- Defining Bias: Highlight the underlying bias within each phase to guide trading strategies.
- Support and Resistance Levels: Offer indicative levels for planning entries and exits, minimizing risk.
By combining these insights with broader trend analysis, traders can position themselves to capitalize on opportunities while mitigating risks.
Want to know more?
Contact us via email ([email protected]) or WhatsApp (+65 6222 9703) to receive actionable analysis that empowers your trading decisions. Let us help you navigate the complexities of trending and cyclical markets with confidence.
