Gold And Silver Consolidate Lows Amid Risk Aversion And Dollar Strength

Gold is trading slightly down on Monday as the metal couldn’t take profit of the risk aversion environment in the market due to dollar strength.

The latest developments in the trade war between the United States and China are hurting the sentiment. Investors are digesting Google’s announcement to suspend businesses with Huawei in line with Donald Trump’s trade backlist.

Equities are trading down; silver is consolidating 2019 fresh lows, copper and platinum are also posting losses while palladium is up on Monday.

Dollar index is trading flat on the day but the chart is showing that it is just a consolidation move above 97.80 and the scoop is for more gains in the short term.

Gold extends decline to test 1,270

Gold is opening the week with losses as the metal is moving down for the fifth trading day in a row. Despite Monday’s drop is not too deeply, its extension is signaling a confirmation of the break of 1,280.

Currently, XAU/USD is trading at 1,276, 0.12% negative on the day. The pair is now moving in a small intra-day range between 1,270 and 1,280. “The safe-haven demand of the US dollar is taking some of the gloss off gold’s safety,” said Michael McCarthy, an analyst at CMC Markets.

“It is a tough time all around for gold with the break below $1,290 also pressuring it. In the absence of safe-haven demand, I would expect to see ongoing modest pressure on gold prices.”

In the same line, James Hyerczyk, FX Empire analyst believes that “gold prices could continue to get crushed if demand for the greenback rises from a combination of safe-haven demand and a strengthening US economy.”

To the downside, XAU/USD has now strong support ahead of it around 1,266. Below there, 200-day moving average at 1,255.

To the upside, gold needs now a close above the 1,280 first, and then a break above the 50-day moving average at 1,290 level to fuel bulls hopes.

Silver consolidates lows around 14.40

Silver is trading in consolidation mode after reaching fresh 2019 lows around 14.39. The pair is under pressure amid risk aversion on the market but in a king dollar environment.

The chart looks negative for silver with next support being located at 14.30 and then the 14.00 area.

Currently, XAG/USD is trading 0.11% in the day as the unit is pricing at 14.41, after reaching lows since December 6 at the mentioned 14.39. Silver is consolidating levels after the unit lost almost 3.0% on May 16 and 17.

Platinum turns negative and extends decline

XPT/USD is currently trading negative on Monday as the pair was unable to extend its bounce from 830.00 beyond the 200-day moving average at 828.40.

Then, platinum returned to lows, and it is now extending the 4-day decline from 864.90 performed on May 14.

The unit is now trading 0.27% negative on Monday around 816.55. The chart looks bearish with the unit heading to test the 810.00 area. Below there, please check supports at 800.00 and 780.00.