Gold Tests Resistance At $4300 – $4320
Gold is moving higher as traders react to the pullback in the oil markets. Oil prices moved lower amid reports indicating that U.S. and Iran were working on a phased deal to reopen the Strait of Hormuz.
Treasury yields pulled back from recent highs as bond traders focused on recent developments in the oil markets. The yield of 2-year Treasuries pulled back towards the 4.89% level, while the yield of 10-year Treasuries settled near 5.20%. I’d note that the yield of 30-year Treasuries moved higher and climbed above the 5.50% level, which indicates that the sell-off in bond markets is not over yet.
According to FedWatch Tool, the probability of a rate hike at the next meeting in October decreased to 64.2%. The market continues to expect that Fed will raise the rate by 25 bps in October and 25 bps in December. Hawkish Fed policy outlook is bearish for gold that pays no interest.
U.S. dollar moved lower against a broad basket of currencies as forex traders focused on falling Treasury yields. Profit-taking served as an additional bearish catalyst for the American currency. Weaker dollar is bullish for gold and other dollar-denominated commodities.
I’d note that gold traders are cautious and are not ready to buy gold aggressively. The situation in the Middle East remains volatile, and it remains to be seen whether U.S. and Iran will reach a temporary deal. U.S. bond markets remain under strong pressure. Bessent’s buybacks did not work, which indicates that many investors want to reduce their positions in U.S. debt. In case the sell-off in U.S. bond markets continues, yields will move higher, putting additional pressure on gold.
Currently, gold is trying to settle back above the resistance level at $4300 – $4320. In case gold manages to settle above the $4320 level, it will head towards the $4400 level. A move above $4400 will open the way to the test of the next resistance at $4480 – $4500.
Silver Moved Higher As Gold/Silver Ratio Declined
Silver gained ground as gold/silver ratio pulled back towards the 66.50 level. In case gold/silver ratio settles below 66.50, it will head towards recent lows near the 65.00 level, which will be bullish for silver.
Silver needs to settle above the resistance at $65.00 – $66.00 to have a chance to gain upside momentum in the near term. In this case, silver will head towards the $68.00 level. In case silver climbs above $68.00, it will move towards the psychologically important $70.00 level.
On the support side, a move below the 50 MA at $63.76 will open the way to the test of the support level at $61.00 – $62.00.
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See all Gold forecastsPlatinum Gained Ground As Oil Prices Pulled Back
Platinum is moving higher, supported by the pullback in the oil markets. Palladium markets are up by +0.2%, which is neutral for platinum.
The nearest resistance level for platinum is located in the $1780 – $1800 range. If platinum manages to settle above the $1800 level, it will head towards the next resistance, which is located in the $1870 – $1890 range. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
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