Gold Retreats As Treasury Yields Rise
Gold is under strong pressure as traders focus on rising Treasury yields and prepare for the continuation of Fed rate hike cycle.
The yield of 2-year Treasuries climbed above the 4.86% level, while the yield of 10-year Treasuries moved above 5.10% as bond traders bet on hawkish Fed. The recent rebound in U.S. equity markets served as an additional bearish catalyst for bonds as demand for safe-haven assets declined.
FedWatch Tool indicates that there is a 89.4% probability that Fed will raise the federal funds rate by 25 bps at the next meeting. The probability of a 50 bps rate hike declined from 12.7% to 10.6%. Rising interest rates are bearish for gold that pays no interest.
U.S. dollar tested yearly highs, supported by rising Treasury yields and hawkish Fed policy outlook. Strong dollar put additional pressure on gold markets today.
Currently, gold is trying to settle below the support level at $3890 – $4000. In case this attempt is successful, gold will head towards the next support, which is located in the $3780 – $3800 range. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
Silver Attempts To Settle Below $50 As Dollar Tests New Highs
Silver is losing ground as gold/silver ratio climbed towards the 77.50 level. In case gold/silver ratio moves above 78.00, it will head towards the psychologically important 80.00 level, which will be bearish for silver.
Silver declined below the support level at $51.00 – $52.00 and is trying to settle below the $50.00 level. If this attempt is successful, silver will move towards the next support level, which is located in the $47.00 – $48.00 range.
On the upside, silver needs to settle back above the $52.00 level to have a chance to gain upside momentum in the near term. In this case, silver will head towards the $54.00 level.
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See all Gold forecastsPlatinum Pulls Back Amid Falling Demand For Precious Metals
Platinum is moving lower amid broad pullback in precious metals markets. Strong dollar, rising Treasury yields, and higher oil prices serve as negative catalysts for platinum in today’s trading session. Palladium markets are down by -3.6%, putting additional pressure on platinum.
From the technical point of view, platinum failed to settle above the resistance level at $1520 – $1540 and pulled back towards the $1500 level. If platinum manages to settle below $1500, it will head towards the support at $1440 – $1460. A successful test of the support at $1440 – $1460 will open the way to the test of the $1380 level.
On the upside, a move above the resistance at $1520 – $1540 will push platinum towards the next resistance, which is located in the $1600 – $1620 range. If platinum manages to settle above the $1620 level, it will head towards the 50 MA at $1650.
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