Gold Tests New Lows As Dollar Climbs Towards Yearly Highs
Gold is losing ground as traders focus on strong dollar and react to the sell-off in global debt markets.
U.S. dollar gained ground against a broad basket of currencies amid rising demand for safe-haven assets. Traders are worried about the sell-off in European debt markets. The yield of French 10-year bonds climbed above the 4.85% level, while the yield of UK’s 10-year bonds tested the 5.50% level. It remains to be seen whether bond markets will calm down in the near term.
Rising yields are bearish for gold that pays no interest. Even more importantly, the sell-off in bond markets may force some investors to raise cash elsewhere, which could put additional pressure on gold and other precious metals.
In the U.S., bond yields pulled back from highs after a successful auction of 10-year Treasuries. The U.S. Treasury sold $39 billion bonds at 5.3%, below the market yield at the time of the auction. The auction showed that high yields have started to attract investors. The auction provided some support to the price of gold, which moved away from session lows.
Gold settled below the support level at $4160 – $4180 and made an attempt to settle below the $4100 level. If gold settles below $4100, it will head towards the next support level, which is located in the $4000 – $4020 range.
Silver Tests The $60.00 Level As Gold/Silver Ratio Moves Above 68.50
Silver pulled back as gold/silver ratio climbed above the 68.50 level. If gold/silver ratio manages to settle above 69.00, it will head towards the psychologically important 70.00 level, which will be bearish for silver.
Currently, silver is trying to settle below the $60.00 level. In case this attempt is successful, silver will head towards the next support, which is located in the $56.00 – $57.00 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
On the upside, a move above the $62.00 level will push silver towards the 50 MA at $64.21. If silver climbs above the 50 MA, it will head towards the resistance level at $65.00 – $66.00.
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See all Gold forecastsPlatinum Is Under Strong Pressure Amid Broad Sell-Off In Precious Metals Markets
Platinum failed to settle above the resistance level at $1700 – $1720 and suffered a strong sell-off. Palladium markets were down by -3.8% in today’s trading session, which was bearish for platinum.
From the technical point of view, platinum attempts to settle below the support level at $1600 – $1620. If platinum manages to settle below the $1600 level, it will head towards the next support, which is located in the $1520 – $1540 range. A move below the $1520 level will open the way to the test of the $1450 level.
On the upside, platinum needs to settle above the resistance at $1700 – $1720 to gain sustainable upside momentum in the near term. In this case, platinum will move towards the 50 MA at $1760.
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