Gold and Silver saw heavy selling this week, pausing their record-setting advance as traders took profits and liquidity conditions improved. The decline has raised questions about whether the market is entering a deeper downturn, but technicals suggest the move is more of a healthy correction within a still-bullish backdrop.
Reports of increased Silver flows from the U.S. and China into London’s spot market added to the selling pressure, easing recent supply constraints that had intensified price momentum. The additional liquidity gave traders room to unwind speculative positions, accelerating the pullback but also helping to stabilize the market longer-term. This as part of a natural rebalancing after overbought conditions earlier in the month.
While the losses have been sharp, there is no clear structural threat to the broader uptrend. The latest pullback reflects profit-taking and short-term positioning adjustments rather than a breakdown in investor confidence. Demand for precious metals remains underpinned by global macro uncertainty, moderate inflation expectations, and central bank diversification away from U.S. assets.
Technically, Gold remains supported above 3,944.57 cluster, a level that separates sideway consolidation from deeper correction. As long as this level holds, consolidations from 4,381.22 should remain relatively brief. Sustained break above 4,381.22 would signal renewed strength, opening the path toward 161.8% projection of 2,584.24 to 3,499.79 from 3,267.90 at 4,749.25.
However, break of 3,944.57 would argue the latest rise leg from 3,267.90 has completed, and bring deeper correction to 55 D EMA (now at 3,781.78). Such a move would extend consolidation but not necessarily signal a full trend reversal.
Silver is showing a similar pattern. As long as 47.30 cluster holds, correction from 54.44 should stay shallow and short-lived. Another rise to 200% projection of 28.28 to 39.49 from 36.93 at 59.30 should be seen sooner rather than later.
However, a fall below 47.30, would trigger deeper pullback toward 55 D EMA (now at 44.76), before uptrend resumes.
Australia PMI composite ticks up to 52.6, easing inflation keeps RBA on easing track
Australia’s private sector activity sent mixed signals in October, according to the S&P Global Flash PMI survey. Manufacturing PMI slipped back into contraction, falling from 51.4 to 49.7, while Services PMI rose to 53.1 from 52.4, lifting the Composite PMI modestly from 52.4 to 52.6. The data suggest that overall business activity grew at a slightly faster pace at the start of Q4, though the underlying picture remains uneven across sectors.
According to Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, the divergence between sectors was striking. Manufacturing “notably worsened,” with new orders dropping further and factories shedding jobs amid pressure on profit margins.
In contrast, services activity expanded at a solid pace, but even there, new business growth and hiring momentum slowed, and business confidence weakened.
On a positive note, price pressures continued to ease, with output price inflation falling to a five-year low. This cooling in inflation dynamics should reassure the RBA, which remains on track to pursue further monetary easing.
Full Australia PMI flash release here.