Gold Moves Higher On Weaker Dollar
Gold attempts to rebound as traders focus on weaker dollar and falling oil prices. U.S. dollar is losing some ground against a broad basket of currencies despite the continuation of the sell-off in French bond markets.
The yield of 10-year French government bonds climbed above the psychologically important 5.00% level. Such yields were last seen back in 2002. Bond traders are worried about long-term sustainability of French finances.
Violent protests may force the country to boost spending in order to calm tensions. Such a move would put additional pressure on the weak bond market and push French yields towards higher levels.
It remains to be seen whether problems in France will provide additional support to gold markets in the near term. In the long term, gold’s key function is to protect investors from the insolvency of governments. In this light, the situation in France is bullish for gold.
I’d note that investors may prefer to focus on rising yields in the short term. Gold pays no interest, so rising yields in global bond markets serve as a negative catalyst for gold prices.
Oil markets pulled back as U.S. – Iran talks continued. High oil prices push inflation higher, so central banks will be forced to continue the rate hike cycle. Central banks may become dovish in case oil prices fall after a potential U.S. – Iran deal, so pullbacks in oil markets are bullish for gold.
Gold is moving towards the nearest resistance level, which is located in the $4160 – $4180 range. In case gold climbs above the $4180 level, it will head towards the next resistance at $4300 – $4320. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
Silver Retreats As Gold/Silver Ratio Settles Above 71.50
Silver pulls back as traders take some profits off the table after recent rebound. Gold/silver ratio climbed back above the 71.50 level, which was bearish for silver.
If silver manages to settle above the $58.00 level, it will head towards the $60.00 level. In case silver climbs above $60.00, it will move towards the resistance at $61.00 – $62.00.
On the support side, a successful test of the support at $56.00 – $57.00 will open the way to the test of the support level at $51.00 – $52.00.
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See all Gold forecastsPlatinum Pulls Back As Traders Take Profits After Recent Rebound
Platinum moved lower despite weaker dollar and falling oil prices. Palladium markets were down by -1.1%, putting additional pressure on platinum.
Currently, platinum is trying to settle back below the support level at $1600 – $1620. In case this attempt is successful, platinum will head towards the next support, which is located in the $1520 – $1540 range.
On the upside, a move above the $1650 level will open the way to the test of the resistance level at $1700 – $1720. If platinum climbs above the $1720 level, it will head towards the 50 MA at $1745.
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