Gold (XAUUSD), Silver, Platinum Forecasts – Gold Dives 3.5% As Sell-Off Continues

Gold Retreats As U.S. Inflation Rate Tests New Highs

Gold tests new lows as traders focus on U.S. CPI report and react to Trump’s comments on Iran.

U.S. Inflation Rate increased from 3.8% in April to 4.2% in May due to rising energy prices. Core Inflation Rate grew from 2.8% to 2.9%. Both reports met analyst estimates.

The reports indicated that high energy prices continued to push inflation towards higher levels. Bond traders prepare for potential rate hikes from the Fed. The yield of 2-year Treasuries climbed above the 4.13% level, while the yield of 10-year Treasuries tested the 4.55% level.

The potential start of the rate hike cycle is bearish for gold and other precious metals that pay no interest. Gold is under strong pressure as traders worry that Fed will be forced to raise rates due to high inflation.

Oil prices gained 3% as President Trump said that U.S. will attack Iran hard. He added that Iran “should sign their deal”. High oil prices are bearish for gold as they will force central banks to raise rates.

Gold settled below the support level at $4180 – $4200 and pulled back towards the $4100 level. In case gold declines below the $4100 level, it will head towards the next support level, which is located in the $4000 – $4020 range. RSI is in the oversold territory, so the risks of a pullback are increasing.

Silver Remains Under Pressure

Silver tests new lows as traders worry about hawkish central banks. Gold/silver ratio pulled back towards the 63.50 level, providing some support to silver markets.

Currently, silver is trying to settle below the support at $65.00 – $66.00. In case this attempt is successful, silver will head towards the next support level, which is located in the $61.00 – $62.00 range. RSI remains in the moderate territory, so there is enough room to gain additional downside momentum in case the right catalysts emerge.

On the upside, silver needs to settle back above the $66.00 level to have a chance to gain upside momentum in the near term. A move above the $66.00 level will push silver towards the resistance at $71.00 – $72.00.

Platinum Tests New Lows As Pullback Continues

Platinum remains under strong pressure amid broad pullback in precious metals markets. Palladium markets are mostly flat, which is neutral for platinum.

Traders worry that high oil prices will hurt economic growth, reducing demand for platinum. Rising interest rates will likely put additional pressure on demand, so today’s U.S. CPI report served as an additional bearish catalyst for platinum.

Platinum pulled back below the support level at $1680 – $1700 and made an attempt to settle below the $1650 level. In case platinum settles below the $1650 level, it will move towards the support level at $1600 – $1620. RSI has recently moved into oversold territory, so the risks of a rebound are increasing.

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