Gold continues to drift slightly lower this week, still closely following its 50MDA without any major conviction in either direction. Silver, however, is sitting almost perfectly on its own 50MDA and appears to be waiting for a catalyst before making its next move. Traders continue to watch inflation data, energy pricing and geopolitical tensions closely, particularly as silver often reacts more aggressively once momentum begins to build.
The Australian sharemarket and property sector are still digesting the Federal Budget and its proposed changes to capital gains tax treatment. For many investors and accountants, the changes have added another layer of complexity to an already complicated tax environment. In some situations, the new approach may result in investors paying more tax than they would have under the previous 50% discount structure, particularly on long-held growth assets.
Property investors are now weighing up whether holding residential property remains as attractive as it once was, especially alongside already elevated interest rates and rising holding costs. Auction activity across Sydney has softened slightly, with some investors appearing hesitant while they assess how the new tax landscape could affect future returns.
In the United States, homebuilder confidence improved modestly during the latest reporting period, rising to a reading of 39. While still below the “healthy” confidence level of 50, the improvement suggests builders are beginning to see some stabilisation in the market. Building material costs also eased slightly during the period, giving the sector a small amount of breathing room after several years of relentless cost pressures.
Markets also appear calmer globally for the moment. The VIX, often referred to as the “fear index”, has fallen to 16.76 following a temporary cooling in tensions between the US and Iran. Earlier this year, during the height of market concern in late March, the VIX surged above 31.
As volatility falls, investors often begin rotating money away from defensive assets like gold and into higher-risk assets such as equities. That partly explains why the US500 has remained strong despite ongoing geopolitical uncertainty and inflation concerns simmering underneath the surface.
Still, while markets look calmer for now, many investors remain cautious. Inflation pressures have not fully disappeared, energy markets remain fragile, and global debt levels continue climbing. Gold may be easing slightly in the short term, but many long-term holders continue viewing bullion as insurance against the unknown rather than simply a short-term trade.
Indicators
Technical Indicators FOR GOLD – Weekly Projections
Daily technical indicators – STRONG SELL, leading into weekly projection SELL
Weekly technical indicators chart.
Learn more about technical indicators and what they mean.
| Indicator | Value |
|---|---|
| RSI(14) | Neutral |
| STOCH(9,6) | Neutral |
| STOCHRSI(14) | Oversold |
| MACD(12,26) | Buy |
| ADX(14) | Sell |
| Williams %R | Sell |
| CCI(14) | Sell |
| ATR(14) | Less Volatility |
| Highs/Lows(14) | Sell |
| Ultimate Oscillator | Buy |
| ROC | Sell |
| Bull/Bear Power(13) | Sell |
The VIX, or Volatility Index, is often called the market’s “fear gauge”. It measures expected volatility in the US sharemarket over the next 30 days using options pricing on the S&P500. A high VIX generally means investors are nervous and expecting larger market swings. During periods of war, financial stress, inflation scares or recession fears, the VIX often rises sharply. Lower readings usually signal calmer market conditions and stronger investor confidence. Historically, a rising VIX often coincides with investors moving into safer assets such as gold, cash or government bonds. When the VIX falls, investors tend to become more comfortable taking on risk again, which can push money back into shares and speculative assets.
