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Gold, Silver, Platinum Forecasts – XAU Hits Record High Amid U.S. Rate Cut Speculation, Weakening Dollar

By:
James Hyerczyk
Updated: Mar 6, 2024, 18:22 GMT+00:00

Key Points:

  • Record high for gold, driven by U.S. monetary policy easing expectations.
  • Silver climbs, mirroring gold's trend amid low interest rate benefits.
  • Platinum up 2.4%, boosted by investment and industrial demand.
Gold, Silver, Platinum

In this article:

Gold

Daily Gold (XAU/USD)

Gold (XAU/USD) reached a new record high, fueled largely by expectations of U.S. monetary policy easing. The additional boost came as the dollar weakened following Federal Reserve Chair Jerome Powell’s indication of a potential rate cut later in the year.

Typically, gold struggles in environments of high U.S. interest rates, which increase returns on competing assets and bolster the dollar, thereby raising gold’s cost in other currencies. However, the current market reaction to policy expectations has been significantly stronger than long-term value models suggest.

Commodity Trading Advisors (CTAs) are now aggressively long on gold, holding positions close to their historical maximum.

Technically, the only price standing in the way of a surge into $2200 is today’s intraday high at $2150.09.

Silver

Daily Silver (XAG/USD)

Silver (XAG/USD), alongside gold, also saw a rise, reflecting similar market factors. Like gold, silver benefits from lower interest rates, which reduce the opportunity cost of holding non-yielding assets. Additionally, silver’s industrial uses contribute to its demand, making it sensitive to global economic indicators.

XAG/USD is in an uptrend on the daily chart. The market is currently within striking distance of resistance at $24.50. This level is a potential trigger point for an acceleration into the December top at $25.91.

Platinum

Daily Platinum (CFD)

Platinum increased by 2.4%, buoyed by a mix of investment and industrial demand, while palladium jumped over 10%, driven by fund purchases and technical trading. The automotive sector, consuming the bulk of palladium, experienced a demand drop due to a shift towards cheaper platinum in autocatalysts and the rise in electric vehicle production. Despite this, palladium has shown resilience, partly attributed to a possible revival in demand and strategic buying.

The CFD for Platinum is up sharply on Wednesday, testing the 50-day moving average at $910.10. Overcoming this level should lead to a quick test of the 200-day moving average at $923.33.

Not only is the 200-day MA resistance, but it’s also a potential trigger point for an acceleration to the upside with $1013.53 the next target.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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