Gold (XAUUSD), Silver, Platinum Forecasts – Gold Dives 4.5% As Traders Focus On Hawkish Central Banks

Gold Retreats As Traders React To Hawkish Comments From Global Central Banks

Gold suffered a strong sell-off as traders reacted to central banks’ interest rate decisions. Fed, ECB, BoE, and BoJ left rates unchanged, in line with analyst estimates. However, their comments were hawkish.

Yesterday, Fed Chair Powell said that some Fed members were ready to consider a rate hike. This comment put material pressure on gold markets.

ECB indicated that inflation presented a serious threat and that the war in the Middle East made the outlook uncertain. Traders price in two rate hikes from the ECB this year.

All BoE members voted to keep the rate unchanged at 3.75%, while analysts believed that two members will vote for a cut. There are no dovish members in the BoE right now, which indicates that the Bank may start hiking rates soon if inflation rises due to high energy prices.

BoJ signaled that it would think about a rate hike at the next meeting despite rising energy prices, which put significant pressure on the Japanese economy.

From a big picture point of view, all central banks focused on inflation risks and showed that they were ready to raise rates if neccessary. Higher interest rates are bearish for gold and other precious metals that pay no interest.

In addition, the sudden end of the global rate cut cycle deals a significant blow to the bullish thesis in gold markets. Previously, gold and other precious metals were moving higher as traders bet that central banks will keep cutting rates to boost economic growth.

At this point, geopolitical tensions serve as a negative catalyst for gold markets. While central banks keep buying gold to diversify their reserves, speculative traders are selling their positions amid falling risk appetite.

Currently, gold is trying to settle below the support at $4660 – $4680. In case this attempt is successful, gold will head towards the next support level, which is located in the $4400 – $4420 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Silver Is Under Strong Pressure As Pullback Continues

Silver tested new lows as gold/silver ratio climbed towards the 65.00 level. It should be noted that some traders were ready to use the pullback as an opportunity to enter long positions, so silver rebounded from session lows.

In case silver settles below the $71.00 level, it will head towards the next support level at $64.00 – $65.00. A move below the $64.00 level will provide silver with an opportunity to gain additional downside momentum.

Platinum Tests Support At $1880 – $1900

Platinum is losing ground amid broad pullback in precious metals markets. Palladium markets are down by 2%, which is also bearish for platinum.

Oil prices pulled back from session highs and moved lower, but this pullback did not provide any support to platinum markets. Traders remain worried that high energy prices will hurt global economy and reduce demand for platinum.

A successful test of the support level at $1880 – $1900 will open the way to the test of the next support, which is located in the $1785 – $1805 range.

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