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

Gold Tests Support At $4660 – $4680

Gold is losing ground as Treasury yields rise after U.S. inflation report. The report indicated that Inflation Rate increased from 3.3% in March to 3.8% in April, compared to analyst forecast of 3.7%.

The yield of 2-year Treasuries tested the 4.00% level as bond traders reacted to the inflation report and bet on hawkish Fed. Rising Treasury yields are bearish for gold that pays no interest.

Importantly, the yield of 30-year Treasuries climbed back above the 5.00% level. A move towards the 5.50% level may have a major impact on global markets. The yield of 30-year Treasuries has not climbed above 5.18% since July 2007.

U.S. dollar gained ground against a broad basket of currencies, supported by rising Treasury yields. Strong dollar put additional pressure on gold markets in today’s trading session.

Oil prices continued to move higher as traders focused on the lack of progress in U.S. – Iran negotiations. Rising oil prices reduce investors’ appetite for risk, which is bearish for gold markets. At this point, gold is not ready to return to its traditional role of a safe-haven asset and continues to trade as a risk asset.

Currently, gold is trying to settle back below the support level at $4660 – $4680. In case this attempt is successful, gold will head towards the next support, which is located in the $4530 – $4550 range.

On the upside, a move above the $4700 level will push gold towards the 50 MA at $4757. In case gold climbs above the 50 MA, it will head towards the resistance level at $4860 – $4880.

Silver Moves Lower As Traders Take Profits After Rally

Silver pulled back as traders rushed to take some profits off the table after the strong rally. The pullback was moderate as gold/silver ratio was mostly unchanged near the 55.00 level. A move below the 55.00 level will push gold/silver ratio towards 52.00, which will be bullish for silver.

From the technical point of view, silver needs to settle above the resistance at $85.00 – $86.00 to gain additional upside momentum in the near term. If silver settles above $86.00, it will head towards the resistance level at $95.00 – $96.00. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the support side, a move below the $83.00 level will open the way to the test of the nearest support, which is located in the $78.00 – $79.00 range.

Platinum Declines As Oil Prices Test New Highs

Platinum has also moved lower amid profit-taking. Palladium markets were down by -2.3%, putting additional pressure on platinum.

Rising oil prices may present a serious threat to platinum, which is dependent on industrial demand. That said, the market remains optimistic, and platinum has moved away from April lows.

If platinum stays above the support level at $2040 – $2060, it will get to another test of the $2140 level. A successful test of this level will open the way to the test of the resistance at $2210 – $2230.

In case platinum pulls back below the support at $2040 – $2060, it will head towards the next support level at $1880 – $1900.

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