Gold (XAUUSD), Silver, Platinum Forecasts – Silver Tests New Highs As Rally Continues

Gold Moves Lower As Dollar Tests New Highs

Gold pulls back as traders focus on stronger dollar and rising Treasury yields. The yield of 2-year Treasuries continues its attempts to settle above the 4.00% level.

The yield of 30-year Treasuries climbed above the psychologically important 5.00% level and is trying to settle above 5.05%. The continuation of this move may have a material impact on global market dynamics.

Treasury yields are moving higher as traders react to U.S. Producer Prices report. The report showed that Producer Prices increased by +1.4% month-over-month in April, compared to analyst forecast of +0.5%.

From a big picture point of view, the report indicated that high energy prices will have a significant impact on inflation. There’s a lag between Producer Prices and Inflation Rate, so inflation will likely test new highs in the upcoming months. As a result, Fed may be forced to raise rates to fight inflation.

U.S. dollar gained ground against a broad basket of currencies as traders bet on hawkish Fed. Strong dollar is bearish for gold as it makes the metal more expensive for buyers who have other currencies.

Notably, India decided to increase tariffs on gold and silver imports. The country is trying to save its foreign exchange reserves. The tariff rate was raised from 6% to 15%. The move shows that Indian government does not believe that citizens will listen to Modi’s recent appeal to stop buying gold for a year and is ready to use tariffs to cut consumption.

From the technical point of view, gold continues its attempts to settle below the support at $4660 – $4680. In case gold manages to settle below the $4660 level, it will move towards the next support at $4530 – $4550.

Silver Gains Ground As Gold/Silver Ratio Drops

Silver tests new highs as gold/silver ratio declined towards the 53.00 level. The strong pullback in gold/silver ratio shows that speculative traders continue to increase their long positions in silver. If gold/silver ratio settles below 52.00, it will head towards the 49 level, which will be bullish for silver.

Silver climbed above the previous resistance at $85.00 – $86.00 and is trying to settle above the $90.00 level. In case this attempt is successful, silver will move towards the next resistance at $95.00 – $96.00. RSI is close to the overbought territory, but there is enough room to gain momentum in the near term.

On the support side, a successful test of the support at $85.00 – $86.00 will open the way to the test of the next support at $78.00 – $79.00.

Platinum Attempts To Settle Above $2200

Platinum continues to move higher as traders ignore U.S. Producer Prices data and focus on the pullback in the oil markets. Oil prices moved higher as traders prepare for Trump – Xi meeting in Beijing, which will take place tomorrow.

The nearest resistance level for platinum is located in the $2210 – $2230 range. If platinum manages to settle above the $2230 level, it will move towards the next resistance at $2410 – $2430.

On the support side, a move below the $2140 level will push platinum towards the nearest support at $2040 – $2060.

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