Gold And Silver Post Gains Amid Brexit Concerns
Gold is trading positive on Tuesday as investors are taking advantage of a risk aversion environment due to the Brexit vote in the UK.
Also, the European Commission agreed to changes to the United Kingdom Brexit deal.
The British Pound rose on the decision, with the USD getting pressure to the downside. So, investors got reasons to buy commodities.
However, Attorney General Cox presented his legal advice letter which said that the United Kingdom would have no lawful means for a Brexit arrangement.
Long story short, Cox said that the legal risk remains unchanged.
Then, the Pound pared gains, and it started to fall against the US Dollar. GBP/USD is now trading 0.90% negative on the day, after dropping from 1.3300 to current 1.3025 amid Brexit news.
Cable’s drop is pushing the dollar index up, but gold is still holding gains with the unit trading sideways.
IG Markets Analyst Kyle Rodda said to CNBC that “a lower chance of the UK crashing out of the EU with no deal will prop up the pound and push down the dollar, supporting bullion.”
The risk environment is supporting gold despite the drop in the British Pound. However, the fundamental analyst seems to be right.
On the other hand, pay attention to economic data in the United States such as its inflation numbers for February as it will be a catalyst for dollar price, so does for precious metals.
Gold advances on the day after proving 1,290 as a ‘good support’
Gold is trading positive after the retracement performed on Monday.
A range between 1,290 and 1,300 now traps the pair, but technical indicators suggest more gains in the short and middle term.
XAU/USD is currently trading at 1,295, 0.17% positive on the day as the pair is extending the recovery from 1,280 started on March 7.
The bullion is being supported by the 1,290 level, a line that worked before as a resistance.
However, recent political developments in the United Kingdom are limiting gold’s gains.
Technical indicators are suggesting more gains with studies heading north. Next resistance can be identified at 1,300, with the 1,310 as short term target.
On the other hand, 1,290 is the support to break if bears want the metal go down. Below there, check supports at 1,280 and 1,275.
Silver up after breaking above 15.35
Silver is trading higher on Tuesday as the metal is decoupling from gold and posting gains amid a technical break at 15.35.
After a brief setback on Monday, silver is extending on Tuesday is recovery started at 15.00 on March 8.
Currently, XAG/USD is trading at 15.41, 0.65% positive on the day as the pair is pricing at 1-week highs.
The technical picture suggests more gains in the short term with 15.50-60 as the next resistance area. Above there, 16.20 will be the critical frontier.
To the downside, XAG/USD needs to close below 15.35 to give bears hopes for more declines. Then, the 15.20 level will be the next support, then 15.00 is a critical level to watch.