Gold Tests New Highs As Treasury Yields Pull Back
Gold gains ground as traders react to the pullback in Treasury yields, which was driven by the huge sell-off in U.S. equity markets.
NASDAQ index is down by more than 5% as traders rush to sell AI-related stocks. The panic was triggered by results of midterm elections as traders worred that Democrats would boost AI regulation. However, it looks that valuation concerns were the key reason for the strong pullback.
Demand for safe-haven assets increased as traders tried to protect themselves from the sell-off in the equity markets. Buying U.S. bonds was the most popular trade today. As a result, the yield of 2-year Treasuries declined towards the 4.48% level, while the yield of 10-year Treasuries pulled back towards 4.83%. Falling Treasury yields provided support to gold prices.
U.S. dollar is losing some ground against a broad basket of currencies as traders focus on BoE Interest Rate Decision. The Bank of England raised the interest rate from 3.75% to 4.0% and delivered a hawkish signal. Weaker dollar served as an additional positive catalyst for gold markets.
It remains to be seen whether gold will regain its safe-haven status in the near term. At this point, global fund managers are mostly focused on buying U.S. bonds.
Currently, gold is trying to settle above the $4100 level. In case this attempt is successful, gold will head towards the next resistance level, which is located in the $4180 – $4200 range. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
Silver Moves Away From Session Highs As Gold/Silver Ratio Climbs Above 78
Silver gained some ground but failed to develop sufficient upside momentum as gold/silver ratio climbed back above the 78.00 level. In case gold/silver ratio stays above 78.00, it will head towards the psychologically important 80.00 level, which will be bearish for silver.
From the technical point of view, silver needs to settle above the resistance at $51.00 – $52.00 to gain upside momentum in the near term. In this case, silver will head towards the $55.00 level. A move above $55.00 will push silver towards the resistance at $56.00 – $57.00.
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See all Gold forecastsPlatinum Tests Resistance At $1520 – $1540
Platinum is moving higher amid rising demand for precious metals. Palladium markets are up by +4%, providing additional support to platinum. It looks that short-covering continues to provide support to platinum markets.
I’d note that the rebound in the oil market did not put any pressure on platinum prices today. Oil gained 3% as traders focused on risks of escalation in the Middle East.
Platinum attempts to settle above the resistance level at $1520 – $1540. In case platinum manages to settle above the $1540 level, it will head towards the resistance level at $1600 – $1620.
On the support side, a move below the $1450 level will push platinum back towards the support level at $1440 – $1460.
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