Gold Moves Lower As Dollar Tests New Highs
Gold is losing ground as traders focus on strong dollar and rising Treasury yields.
U.S. dollar gained ground against a broad basket of currencies as traders focused on the ISM Services PMI report. The report missed analyst estimates but indicated that the services sector remained in decent shape. Strong dollar is bearish for dollar-denominated commodities, including gold.
Treasury yields gained ground as the bond market sell-off continued. The yield of 2-year Treasuries climbed above the 4.85% level, while the yield of 10-year Treasuries settled near 5.35%. The yield of 30-year Treasuries tested multi-decade highs above the 5.70% level.
FedWatch Tool indicates that there is a 23.8% probability that Fed will raise rates at the next meeting in October. However, Treasury yields keep moving higher as traders worry about long-term sustainability of U.S. finances. At this point, these worries did not provide significant support to gold markets as traders have mostly focused on rising yields. Higher yields are bearish for gold that pays no interest.
Gold continues its attempts to settle below the support level at $4160 – $4180. If gold manages to settle below the $4160 level, it will head towards the next support level at $4000 – $4020. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
Silver Gains Some Ground As Gold/Silver Ratio Pulls Back
Silver gained ground as gold/silver ratio pulled back below the 68.00 level. If gold/silver ratio settles below the 50 MA at 67.55, it will move towards the 66.00 level, which will be bullish for silver.
The technical picture remains unchanged as silver is stuck near the support level at $61.00 – $62.00. If silver settles below the $61.00 level, it will head towards the next support level at $56.00 – $57.00.
On the upside, silver needs to settle back above the $62.00 level to have a chance to gain upside momentum in the near term. In this case, silver will head towards the 50 MA at $64.07. A move above the 50 MA will open the way to the test of the resistance level at $65.00 – $66.00.
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See all Gold forecastsPlatinum Attempts To Settle Back Above The $1700 Level
Platinum moved higher as traders reacted to the pullback in the oil markets and ignored stronger dollar and rising Treasury yields. Oil prices pulled back by -2% amid reports indicating that Saudi Arabia has fully restarted its East-West pipeline. Palladium marekts gained +0.3% in today’s trading session, which was neutral for platinum.
If platinum moves above the $1720 level, it will head towards the 50 MA at $1758. A move above the 50 MA will open the way to the test of the resistance level at $1780 – $1800.
On the support side, a move below the $1670 level will push platinum towards the next support level, which is located in the $1600 – $1620 range. If platinum declines below the $1600 level, it will head towards the $1520 level.
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