Gold And Silver Down as Dollar bounces; Focus on Brexit VoteGold and silver are trading down on the day amid US Dollar rebound. Experts don’t expect big movements in the charts today. All eyes on Brexit.
Precious metals such as Gold and Silver are trading down on Thursday as the Dollar index bounced after four negative sessions. Investors focus now on Brexit tensions and its vote in the UK parliament.
The greenback is back!
The dollar index is recovering ground after four negative sessions in a row as the unit found support at 96.39 on Wednesday.
The greenback is also getting traction by solid economic data in the United States and hopes of US-China trade talks.
A possible Trump-Xi meeting on Mar-a-Lago resort is on the table for April.
Currently, DXY is trading at 96.71, 0.24% positive on the day.
Brexit vote to define GBP and Gold fate
On the other hand, The United Kingdom Parliament will vote on Brexit extension later today.
Speculations that the DUP would support May’s deal and that Brexit will be delayed pushed the GBP/USD down. However, as uncertainty remains, the British Pound was unable to maintain gains.
However, as ANZ Analyst said to CNBC earlier in the day, “If we do see the deadline pushed out, there would not be a huge impact (in gold prices). But the reaction will be great if we see some sort of deal agreed to in the UK parliament.”
Long story short, the US Dollar profited from the environment and its commodity rivals were sent down.
Gold falls and returns below 1,300
Gold is trading negative on Thursday after posting two days of gains as solid data in the United States, and Brexit concerns relief are pushing the USD back to the rise.
The yellow metal got a rejection at the 20-day moving average in the last two days. It is currently trading below the 1,300 mark.
Now, XAU/USD is trading at 1,297, 0.88% down on the day. Next support is at 1,290 with the 1,280 as the most significant frontier.
However, experts consider the pullback will be short-lived as gold is likely to remain supported by speculations of a slowing global economy.
Weak economic outlook will “push the major central banks toward the dovish side, and may even encourage a few to slash their benchmark interest rates,” FX Empire analyst James Hyerczyk said in a recent article.
“However, unless the Fed shifts gears to more dovish, gold’s gains are likely to be limited.”
As uncertainty remains over the table, gold losses will be linked to possible positive events on the Brexit story. However, the long term picture suggests more gains for the metal.
Silver fell hard and lost three days of gains
Silver is trading negative on Thursday as investors are betting on the US Dollar and the unit is following its correlation with Gold.
After rejecting the 15.55 area on Wednesday, Silver started a decline that sent XAG/USD down to 15.20, where the pair is trading now.
With 1.15% losses on the day, Silver is now eyeing the 200-day moving average at 15.15. But the real frontier lies at the 15.00 critical support.