Gold (XAUUSD), Silver, Platinum Forecasts – Gold Retreats As Oil Prices Test New Highs

Gold Is Losing Ground As Oil Prices Rally

Gold pulls back as traders react to the strong rally in the oil markets. Oil prices are up by +3.5% as President Trump said that the U.S. could hit more targets in Iran this night.

Iran’s recent attack on vessels in the Strait of Hormuz triggered a new round of escalation. This time, it looks that both U.S. and Iran are ready to escalate, so traffic in the Strait of Hormuz could be halted again.

Treasury yields moved higher as bond traders bet that rising tensions in the Middle East would trigger inflationary risks. The yield of 2-year Treasuries climbed towards the 4.22% level, while the yield of 10-year Treasuries settled near 4.58%. Rising Treasury yields put material pressure on gold that pays no interest.

FedWatch Tool indicates that there is a 32.6% chance that Fed would raise rates at the meeting at the end of July. The probability of a first rate hike in September has increased to 51.3%. The hawkish changes in Fed policy outlook may put additional pressure on gold prices in the upcoming trading sessions.

U.S. dollar was swinging between gains and losses against a broad basket of currencies despite rising Treasury yields. Dynamics of the American currency did not have a material impact on gold prices today.

Currently, gold is trying to settle below the support level at $4020 – $4040. In case this attempt is successful, gold will head towards the next support, which is located in the $3930 – $3950 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

Silver Dives Amid Worries About Hawkish Fed

Silver is under strong pressure as gold/silver ratio climbed above the psychologically important 70.00 level. If gold/silver ratio settles above 70.00, it will head towards recent highs at 71.37, which will be bearish for silver.

From the technical point of view, silver is trying to settle below the support level at $56.00 – $57.00. This support level has been tested many times and proved its strength. A move below the $56.00 level may trigger a sell-off as speculative traders would rush to close their positions. In case silver settles below $56.00, it will head towards the support level at $51.00 – $52.00.

On the upside, silver needs to settle back above the resistance level at $61.00 – $62.00 to have a chance to gain upside momentum in the near term.

Platinum Pulled Back Below The $1600 Level

Platinum is losing ground amid broad pullback in precious metals markets. The strong rally in the oil markets put material pressure on platinum, which is dependent on industrial demand. Palladium prices are down by -3.5%, putting additional pressure on platinum.

Platinum failed to settle above the resistance level at $1600 – $1620 and pulled back towards the $1570 level. In case platinum settles below $1570, it will head towards the support, which is located in the $1500 – $1520 range.

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