Goldeneyes on economic data

Goldeneyes On Economic Data as Key Ratio Sends Signal to Traders

By:Thomas Westwater

Gold is outpacing silver but technicals are bearish

  • Gold prices pace higher as silver lags.
  • Economic data may shift the outlook on metals.
  • Gold’s technical chart sees bearish signal.

Gold prices (/GC) are outpacing silver prices (/SI) on Monday as traders digest the latest comments from Federal Reserve officials, while awaiting some potentially high-impact economic data prints.

A modest pullback in Treasury yields, especially along the policy-sensitive short end of the curve, is allowing some upside for precious metals. The dollar is also weakening, making it cheaper for foreign buyers to purchase the metal.

Economic data in focus for gold traders

Gold prices have performed well recently as real interest rates fell, which makes gold more attractive to investors. With the Federal Reserve likely at or near the peak of its current rate hiking cycle, real rates may continue to fall, which would benefit gold further. The real interest rate is computed as the nominal rate of interest, less the rate of inflation.

At present, market sentiments are slightly inclined toward an additional 25 basis-point rate hike in November, with Fed funds futures pricing the probability slightly above 50%. The forthcoming economic data this week might sway these predictions, Hence, gold prices are expected to respond to any unexpected revelations in the data.

The U.S. second estimate for the second-quarter gross domestic product (GDP) is slated for release Wednesday, with analysts predicting a 2.4% rise from the previous quarter. On Thursday, the personal consumption expenditures index (PCE) is expected to register at 4.2% from July of the previous year. If this rate, or the core rate—a measure that excludes the volatile food and energy prices—surpasses expectations, it could strengthen rate hike bets, which could negatively impact gold.

Another significant data point to monitor is the U.S. non-farm payrolls report for August, which is due Friday. The consensus of +170,000 would signify a promising slowdown, bolstering the argument that rates should remain steady. However, if the headline figure exceeds that number, it could potentially exert downward pressure on gold and silver.

Gold/silver ratio says silver outperformance may be over for now

Gold is about 1.5% over the past two weeks, while silver gained nearly 7% during the same period. That has pushed the gold/silver ratio below the 80 level and near the lowest it has traded since January. This suggests silver may not continue to see outsized gains versus gold during the next rally.

gold/siler ratio

Gold technical outlook

A bearish crossover between the 50- and 200-day Simple Moving Averages in the gold price chart is tempering the technical outlook. The crossover, known as a death cross, shows a decline in the short-term moving average that many traders see as bearish regarding future price action.


Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.