Gold Reclaims Long-Term Uptrend as Precious Metals Extend Breakout Rally

Precious metals extended their August recovery overnight during US trading, with gold and silver building on last week's gains up a staggering 7.7% and 9.5% respectively week-on-week. 

These gains continue to stem from a weaker U.S. dollar (US dollar strength index or DXY reached its lowest level of 98.8 since mid-May), growing concerns around U.S. fiscal sustainability (ABC Bullion), and fading expectations of further Federal Reserve tightening (CME Group). 

Gold is now trading at its highest levels since mid-May, while silver and platinum emerge as some of the strongest-performing major assets month to date outperforming Oil as well as key major Australian (ASX 200) and UK (MSCI UK) indices which outperformed in July.  

Daily Performance 

• Gold: +1%, currently trading at USD $4,670oz and AUD $6,532oz, +7.7% week-on-week.   

• Silver: +0.4%, currently trading at USD $69.3oz and AUD $97oz, +9.5% week-on-week. 

• Platinum: +0.6%, currently trading at USD $1,890oz and AUD $2,643oz, +10.3% week-on-week.  

Technical Analysis 

Gold has successfully reclaimed its 200-day moving average (USD $4,527oz) and is currently trading around 3% above this key long-term trend indicator, broadly in line with its historical average of approximately 4.3%.  

The recent recovery reflects a classic mean-reversion pattern, consistent with previous precious metals corrections observed since 2000 (ABC Bullion). Following January's peak, when gold traded nearly 48% above its 200-day moving average, the market underwent a significant correction that ultimately saw prices fall to approximately 13% below the 200-day moving average by mid-July.  

The subsequent rebound suggests the correction has largely normalised overbought technical conditions, with gold now returning to levels more consistent with long-term trends. 

Luke Tyler
Senior Analyst, ABC Bullion

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