Gold (XAUUSD), Silver, Platinum Forecasts – Gold Retreats As Oil Prices Rally

Gold Pulls Back As Oil Markets Test New Highs

Gold is losing ground as traders focus on the strong rally in the oil markets. Houthis have captured a key port on the Red Sea and now have full control over the Bab-el-Mandeb Strait. The forces of Yemen’s official government were defeated. At this point, Saudi Arabia was unable to provide support to the official government of the country.

Houthis’ victory is a major defeat for Saudi Arabia as the country’s opponents control both routes for oil exports: the Strait of Hormuz and the Bab-el-Mandeb Strait.

Not surprisingly, Brent oil rallied above the $107.00 level as traders focused on additional risks for oil exports. Oil’s rally will likely force the Fed to raise rates at the next meeting, which is bearish for gold.

Meanwhile, the sell-off in bond markets continued. The yield of 2-year Treasuries climbed above the 4.55% level, while the yield of 10-year Treasuries settled above 4.93%.

U.S. dollar gained ground against a broad basket of currencies as traders reacted to rising Treasury yields and focused on the Producer Prices report, which indicated that inflationary pressure remained at high levels. Stronger dollar served as a bearish catalyst for gold in today’s trading session.

Traders also focused on the ECB Interest Rate Decision. The European Central Bank raised the interest rate from 2.4% to 2.65%, in line with analyst estimates. The ECB has also hinted that it could raise rates at the next meeting to fight inflation triggered by the strong rally in the oil markets.

The nearest support level for gold is located in the $4300 – $4320 range. If gold declines below the $4300 level, it will head towards the 50 MA at $4266. A move below the 50 MA will open the way to the test of the next support at $4160 – $4180.

Silver Retreats As Traders Focus On Hawkish Central Banks

Silver suffered a strong sell-off as gold/silver ratio climbed towards the 68.00 level. Gold/silver ratio rallied as demand for risk assets declined amid rally in the oil markets.

Currently, silver is trying to settle below the support level at $65.00 – $66.00. In case this attempt is successful, silver will head towards the next support at $61.00 – $62.00. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Platinum Tests Support At $1780 – $1800

Platinum is under strong pressure as traders rush to sell their positions due to the rally in the oil markets. High oil prices could hurt global economic growth and reduce demand for platinum. Palladium markets are down by -5.1%, which is bearish for platinum.

Platinum failed to settle above the resistance level at $1870 – $1890 and pulled back towards the support level at $1780 – $1800. If platinum declines below the $1780 level, it will move towards the next support level at $1700 – $1720.

On the upside, platinum needs to settle above the $1890 level to have a chance to gain upside momentum in the near term. In this case, platinum will head towards the $1950 level.

If you’d like to know more about how to trade gold and silver, please visit our educational area.