Gold (XAUUSD), Silver, Platinum Forecasts – Gold Retreats As Traders Bet On Fed Rate Hikes

Gold Attempts To Settle Below $4000

Gold is moving lower as traders remain worried about hawkish Fed despite recent CPI and PPI reports.

FedWatch Tool indicates that there is a 48.5% probability that Fed will raise the federal funds rate at the meeting in September. Interestingly, the market believes that there is a 5.9% chance of two rate hikes by September. These expectations put pressure on gold markets.

Treasury yields are moving higher, putting additional pressure on the price of gold. The yield of 2-year Treasuries settled above 4.16%, while the yield of 10-year Treasuries climbed above the 4.57% level. Rising Treasury yields are bearish for gold that pays no interest.

U.S. dollar gained ground against a broad basket of currencies as traders focused on the dynamics of Treasury yields. Stronger dollar is bearish for dollar-denominated commodities, including gold.

Oil prices pulled back despite tensions in the Middle East, but gold traders ignored this pullback. It looks that gold traders believe that oil prices will remain elevated in the next months, increasing inflationary pressure and forcing Fed to raise rates.

Gold declined below the support level at $4020 – $4040 and is trying to settle below the psychologically important $4000 level. In case gold manages to settle below $4000, it 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 Retreats Amid Worries About Hawkish Fed

Silver is under strong pressure as gold/silver ratio climbed above the 71.00 level. In case gold/silver ratio settles above 71.30, it will head towards the 74.00 level, which will be bearish for silver.

Currently, 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. In case silver settles below the $56.00 level, it will gain additional downside momentum and move towards the next support at $51.00 – $52.00.

On the upside, silver needs to climbs back above the $57.00 level to have a chance to gain momentum in the near term. If silver manages to settle back above $57.00, it will move towards the resistance level at $61.00 – $62.00.

Platinum Pulls Back As Demand For Precious Metals Falls

Platinum is moving lower amid broad pullback in precious metals markets. Palladium markets are down by -4.2%, putting additional pressure on platinum. The pullback in the oil markets did not provide any support to platinum as traders focused on hawkish Fed policy outlook.

The nearest support level for platinum is located in the $1600 – $1620 range. If platinum manages to settle back below the $1600 level, it will gain additional downside momentum and move towards the support at $1500 – $1520.

On the upside, a move above the $1650 level will push platinum towards the resisance at $1680 – $1700. A successful test of this level will open the way to the test of the 50 MA at $1777.

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