Gold (XAUUSD), Silver, Platinum Forecasts – Gold Retreats As Geopolitical Premium Declines

Gold Tests Support At $4880 – $4900

Gold is losing ground as traders focus on first results of U.S. – Iran nucelar talks, which were held in Geneva.

According to Iranian officials, Washington and Tehran reached an understanding of main principles of the future deal. That said, multiple issues remain unresolved.

U.S. officials noted that Iran will provide its proposals in detail in the next two weeks.

Today, traders also focused on the strength of the U.S. dollar. The American currency gained ground as traders reacted to weak economic reports from the EU and UK. Stronger dollar is bearish for gold and other dollar-denominated commodities.

Lunar New Year in China continues to serve as an important bearish catalyst for gold and other precious metals. The absence of strong buyers from China has a significant impact on market dynamics. Chinese investors will return next week.

Currently, gold is trying to settle below the support level at $4880 – $4900. In case this attempt is successful, gold will head towards the next support, which is located in the $4670 – $4690 range.

On the upside, a move above the psychologically important $5000 level will open the way to the test of the resistance at $5100 – $5120. This resistance level has been tested many times and proved its strength. Most likely, gold will need significant upside catalysts to climb above the $5120 level.

Silver Retreats As Gold/Silver Ratio Jumps Above 66

Silver tested new lows as gold/silver ratio climbed above the 66.00 level. Gold/silver ratio keeps moving higher, which is a worrisome development for silver bulls.

It should be noted that gold/silver ratio was near 80 several months ago. In case gold/silver ratio climbs towards this level while gold prices stay near current levels, silver could drop towards the $60.00 level.

Not surprisingly, silver traders will closely monitor the trends in gold/silver ratio. In case the current trend continues, bulls may capitulate.

The nearest support level for silver is located in the $71.00 – $72.00 range. If silver declines below the $71.00 level, it will gain additional downside momentum and move towards the next support at February lows at $64.00 – $65.00.

It should be noted that silver may quickly get from $71.00 to $65.00 as traders who bought the recent pullback will likely rush to exit their speculative positions. As noted above, the absence of Chinese investors makes the market vulnerable.

On the upside, silver needs to settle back above the resistance level at $78.00 – $79.00 to gain sustainable upside momentum in the near term.

Platinum Tests The $2000 Level

Platinum continues its attempts to settle below the psychologically important $2000 level.

Strong pullbacks in gold and silver markets put some pressure on platinum prices in today’s trading session. Palladium was down by 3%, which was bearish for platinum.

Platinum has already made several attempts to settle below the $2000 level, but these attempts yielded no results. If platinum settles below $2000, it will move towards the support level at $1880 – $1900. A move below the $1880 level will push platinum towards February lows near the $1785 level.

On the upside, platinum needs to climb back above the resistance at $2040 – $2060 to gain momentum. A successful test of this resistance level will open the way to the test of the 50 MA at $2172. RSI is in the moderate territory, and there is plenty of room to gain momentum in the near term.

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