Gold Retreats As Traders Worry That AI Spending Will Boost Inflation
Gold is losing ground as traders react to developments in U.S. equity markets. The tech-heavy NASDAQ index is down by -2.5% as Meta announced that it would boost spending plans.
Rising spending from AI leaders will likely lead to higher inflation and higher interest rates, which is bearish for gold markets. In addition, some traders may need additional liquidity at a time of a strong pullback in the equity markets. They could be forced to raise money elsewhere, which puts pressure on gold markets.
Treasury yields pulled back as bond traders rushed to buy U.S. bonds amid sell-off in U.S. equity markets. The yield of 2-year Treasuries declined towards the 4.65% level, while the yield of 10-year Treasuries pulled back towards 4.97%. Falling Treasury yields did not provide any support to gold markets in today’s trading session as gold traders focused on AI spending.
Oil prices tested new highs as oil traders focused on the potential restart of the military operation against Iran. The U.S. ordered some diplomats to leave Saudi Arabia amid rising tensions in the Middle East. I’d note that diplomats often leave ahead of military action, so it’s not surprising to see that traders rushed to buy oil futures. Higher oil prices are bearish for gold as they would push inflation higher and force central banks to be more hawkish.
Gold is heading towards the support level, which is located in the $4000 – $4020 range. In case gold manages to settle below the $4000 level, it will head towards the next support at $3890 – $3910. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
Silver Dives As Gold/Silver Ratio Jumps To 73.50
Silver is under strong pressure as gold/silver ratio climbed above the 73.50 level. Gold/silver ratio is moving higher as demand for riskier assets declines. In case gold/silver ratio stays above 73.50, it will head towards the 75.00 level, which will be bearish for silver.
Silver pulled back below the support level at $56.00 – $57.00 and is trying to settle below the $55.00 level. In case this attempt is successful, silver will head towards the next support, which is located in the $51.00 – $52.00 range.
On the upside, silver needs to settle back above the $57.00 level to have a chance to gain upside momentum in the near term. In this case, silver will head towards the psychologically important $60.00 level.
Gold Price Forecast
Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Gold forecastsPlatinum Tests New Lows
Platinum is moving lower amid broad pullback in precious metals markets. Palladium markets are down by -3.1%, which is bearish for platinum.
The nearest support level for platinum is located in the $1520 – $1540 range. In case platinum manages to settle below the $1520 level, it will head towards the next support level at $1440 – $1460.
If you’d like to know more about how to trade gold and silver, please visit our educational area.