Gold Retreats As Oil Prices Test New Highs
Gold is losing ground as traders focus on the rally in the oil markets and focus on stronger dollar.
Oil prices gained 3.5% as traders bet that U.S. and Israel could restart the military operation against Iran this weekend. The potential escalation in the Middle East would push oil prices higher and force the Fed to be more hawkish to fight inflation.
According to FedWatch Tool, the probability of a rate hike at the Fed meeting on October 28 is just 11.1%. However, traders expect that Fed will continue the rate hike cycle in December.
Treasury yields rebounded as bond traders focused on dynamics of oil markets. The yield of 2-year Treasuries climbed above the 4.68% level, while the yield of 10-year Treasuries settled above 4.98%.
U.S. dollar gained ground against a broad basket of currencies, supported by rising yields and stronger-than-expected PMI data. Dollar’s rebound served as an additional bearish catalyst for gold markets.
Currently, gold is trying to settle below the support level at $4000 – $4020. In case this attempt is successful, gold will head towards the next support, which is located in the $3890 – $3910 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.
On the upside, gold needs to settle back above the $4020 level to gain upside momentum in the near term. In this case, gold will head towards the $4100 level.
Silver Tests New Lows
Silver tested new lows as gold/silver ratio climbed towards the 74.00 level. A move above 74.00 will push gold/silver ratio towards the 75.00 level, which will be bearish for silver.
From the technical point of view, silver settled below the support at $56.00 – $57.00 and is trying to settle below the $54.00 level. If silver manages to settle below $54.00, it will head towards the next support at $51.00 – $52.00.
On the upside, a move above the $57.00 level will push silver towards the psychologically important $60.00 level. In case silver settles above $60.00, it will head towards the resistance at $61.00 – $62.00.
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See all Gold forecastsPlatinum Tests Support At $1520 – $1540
Platinum is moving lower amid broad pullback in precious markets, which is driven by rising oil prices and stronger dollar. Palladium markets are down by -0.2%, which is neutral for platinum.
Currently, platinum is trying to settle below the support level at $1520 – $1540. In case this attempt is successful, platinum will head towards the next support, which is located in the $1440 – $1460 range. Interestingly, RSI remains in the moderate territory, so there is enough room to gain additional downside momentum in case the right catalysts emerge.
On the upside, a move above the $1550 level will push platinum towards the nearest resistance at $1600 – $1620. If platinum climbs above the $1620 level, it will head towards the $1700 level.
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