Gold Retreats As Dollar Tests New Highs
Gold is losing ground as traders focus on better-than-expected U.S. PMI reports and bet on hawkish Fed.
According to FedWatch Tool, the probability of a rate hike at the Fed meeting in October increased to 70.9% after the release of PMI data. Manufacturing PMI increased from 53.9 in August to 57 in September, compared to analyst forecast of 53.6. Services PMI grew from 56.5 to 58.7, exceeding the analyst estimate of 56.
Treasury yields rallied as bond traders focused on PMI data. The yield of 2-year Treasuries climbed towards the 4.90% level, while the yield of 10-year Treasuries settled above 5.10%. Rising Treasury yields put significant pressure on gold markets in today’s trading session.
U.S. dollar gained ground against a broad basket of currencies as forex traders focused on hawkish Fed policy outlook. Strong dollar put additional pressure on gold markets today.
Rising oil prices also served as a bearish catalyst for gold today. Brent oil climbed above the $102.00 level amid lack of progress in the Middle East and problems in diesel markets.
Currently, gold is trying to settle below the support level at $4300 – $4320. In case gold manages to settle below the $4300 level, it will head towards the next support, which is located in the $4160 – $4180 range.
Silver Is Under Strong Pressure As Traders Worry About Hawkish Fed
Silver is losing ground as gold/silver ratio climbed back above the 66.00 level. In case gold/silver ratio stays above 66.00, it will head towards the 50 MA at 67.94, which will be bearish for silver.
From the technical point of view, silver failed to settle above the resistance at $65.00 – $66.00 and pulled back towards the $64.50 level. In case silver manages to settle below 64.50, it will head towards the 50 MA at $63.43. A move below the 50 MA will open the way to the test of the support level at $61.00 – $62.00.
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. In this case, silver will move towards the $68.00 level.
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See all Gold forecastsPlatinum Tests The $1750 Level
Platinum is under strong pressure as traders focus on strong dollar, rising Treasury yields, and rising oil prices. Palladium markets are down by -3.4%, which is bearish for platinum.
Platinum attempts to settle below the 50 MA at $1740. If platinum settles below the 50 MA, it will head towards the support level at $1700 – $1720. A move below the $1700 level will open the way to the test of the $1620 level. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
On the upside, a successful test of the resistance at $1780 – $1800 will push platinum towards the next resistance level at $1870 – $1890.
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