Gold (XAUUSD), Silver, Platinum Forecasts – Gold Dives 4% As Traders Focus On War In The Middle East

Gold Is Under Pressure Amid Global Market Sell-Off

Gold suffered a strong sell-off as traders focused on the war in the Middle East. Oil prices gained 7% as Iran attacked several energy sites and closed the Strait of Hormuz.

The huge rally in the oil markets triggered a global market sell-off. U.S. and Israel dealt significant damage to Iran but did not achieve a quick victory. Markets have started to prepare for a lengthy conflict. Earlier, President Trump indicated that the operation against Iran could last 4-5 weeks.

Yesterday, gold benefited from its role as a traditional safe-haven asset. Today, this role did not provide any support. Traders were selling everything in order to raise cash.

U.S. dollar tested new highs against a broad basket of currencies. Traders rushed to the safety of the U.S. dollar, which was bearish for gold and other precious metals. Treasury yields have also moved higher, serving as an additional bearish catalyst for gold markets.

Currently, gold is trying to settle below the support level at $5100 – $5120. In case this attempt is successful, gold will move towards the next support, which is located in the $4880 – $4900 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

Silver Retreats As Traders Close Their Speculative Bets

Silver is under strong pressure as gold/silver ratio climbed above the 61.50 level. Traders worry that high oil prices will hurt global economy and reduce demand for silver.

This year, silver attracted speculative traders who used leverage. While these traders provided material support to silver prices when the market was moving higher, the de-leveraging process serves as a significant bearish catalyst during market sell-offs.

From a big picture point of view, silver remains extremely volatile due to the role of speculative traders. Silver does not have the support of central banks, who only buy gold for their reserves, so it will remain volatile in the upcoming weeks.

From the technical point of view, silver settled below the support at $86.00 – $87.00 and made an attempt to settle below the next support level, which is located in the $78.00 – $79.00 range. A move below the $78.00 level will push silver towards the $71.00 level. On the upside, silver needs to settle back above $87.00 to have a chance to gain upside momentum in the near term.

Platinum Dives As Traders Worry That Middle East War Will Destroy Demand

Platinum markets declined by more than 10% as traders bet that the conflict in the Middle East would hurt demand. Palladium markets were down by almost 8%, which was bearish for platinum.

Traders have started to realize that the Middle East war would not end in the near term. The continuation of the conflict will put significant pressure on global economy, which would be bearish for platinum.

Platinum pulled back towards the nearest support level, which is located in the $2040 – $2060 range. A successful test of this level will open the way to the test of the next support, which is located in the $1880 – $1900 range.

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