Gold (XAUUSD), Silver, Platinum Forecasts – Gold Rebounds As Traders Focus On Bond Buybacks

Gold Gains Ground As Traders Focus On U.S. Debt Market

Gold rebounds as traders focus on Bessent’s decision to boost bond buybacks to $6 billion. In the second half of August, buybacks were raised from $2 billion to $4 billion, but this move did not provide support to the debt market.

Interestingly, bond traders do not believe that buybacks would break the current trend. The yield of 10-year Treasuries settled above the 4.83% level, while the yield of 30-year Treasuries tested the psychologically important 5.30% level.

U.S. dollar pulled back against a broad basket of currencies, which was not surprising as traders worried about long-term sustainability of U.S. finances.

The buyback program is a key positive catalyst for gold and other precious metals. Central banks are buying gold to diversify away from the U.S. dollar as they are worried about two problems. The first one is the heavy use of sanctions, while the second one is the ever-growing U.S. debt pile.

At this point, the market views Bessent’s position as weak. He is forced to increase buybacks as nothing works and yields are moving higher.

Theoretically, higher yields are bearish for gold and other precious metals that pay no interest. However, the market is worried that the situation in the debt market will get out of control. In this case, gold is a natural safe-haven asset against devaluation of a fiat currency, U.S. dollar.

That said, it remains to be seen whether traders are ready to buy gold aggressively as Fed will release its interest rate decision next week. According to FedWatch Tool, Fed is expected to raise the federal funds rate by 25 bps. The probability of this outcome is 62.4%, up from 60.4% yesterday.

Hawkish Fed may put some pressure on gold markets in the near term. Brent oil moved above the $100 level amid escalation in the Middle East so Fed may be forced to start a new rate hike cycle to fight inflation.

Currently, gold is trying to settle above the $4400 level. In case this attempt is successful, gold will move towards the nearest resistance level, which is located in the $4480 – $4500 range. A successful test of the resistance at $4480 – $4500 will open the way to the test of the next resistance at $4630 – $4650.

Silver Rallies As Gold/Silver Ratio Tests New Lows

Silver rallied, supported by Bessent’s move. Gold/silver ratio pulled back towards the 65.00 level, which was bullish for silver. If gold/silver ratio settles below 65.00, it will head towards the 62.00 level, providing additional support to silver markets.

In case silver climbs above the $68.00 level, it will head towards the psychologically important $70.00 level. A move above $70.00 will open the way to the test of the resistance at $71.00 – $72.00. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.

Platinum Soars Amid Strong Demand For Precious Metals

Platinum rallied as traders bet on deficit in the market. Palladium prices are up by +1.2%, providing additional support to platinum.

Currently, platinum is trying to settle above the resistance at $1870 – $1890. This resistance level has been tested several times and proved its strength. In case platinum moves above $1890, it will head towards the next resistance level at $1950 – $1970.

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