Gold Erases Gains As US Treasury Recovers, Recession Fears Recede

Precious metals such as gold and silver are trading down on Tuesday as investors are digesting global economic slowdown fears and recovering US Treasury bonds yields.

Risk appetite is back into the market as bond yields stabilized. US Dollar index is positive, but gains are limited. Stocks are set to rally.

Talking about rising concerns on the global economy, John Sharma, economist at the National Australian Bank said in a recent CNBC article that market is not “hundred percent sure there is going to be a recession as the yield curve inversion should be there for a whole quarter and not just for a day or two.”

James Hyerczyk agreed with Sharma. In another recent article published in FX Empire, Hyerczyk highlighted that “risk of a U.S. economic slowdown has gone up and the Fed has stopped raising rates, which is providing some support for gold; however, there is just not enough there to cause gold prices to skyrocket at this time.”

TD Securities also believes that “This likely was the key reason why gold did not meaningfully follow through higher.”

The bank commented in a recent investing note that “given that the market is increasingly pricing in a US rate cut this year, the US dollar is on a weak footing and considering that equities are generally more worried about growth, gold could well move into a higher trading range sooner than expected.”

Gold down to 1,315 as risk aversion recedes

Gold is trading negative on Tuesday as investors are more willing to bet on riskier assets. Also, Gold is hitting technical levels around 1,320.

Currently, XAU/USD is trading 0.50% negative on the day at 1,315. The pair is trading its first negative day in the last three sessions.

Traders started selling gold after the pair reached 1,324, its highest level since February 28.

To the downside, next support is at 1,310. Below, check 1,305, 50-day moving average.

If the pair manages to recover its mojo, a break above the 1,324 will open the door to the 1,330 resistance level. Above, 1,345 will be the frontier.

Silver down as technical levels limit the pair

Silver is trading down in the session as risk appetite returns to the market and the pair tested significant technical levels.

The 50-day moving average is acting as resistance and it has been limiting the pair since March 1st.

Currently, XAG/USD is trading 0.40% negative on the day at 15.47. The pair was not able to break above the 50-day moving average at 15.60, and it fell as low as 15.40 earlier in the session.

To the downside, next support will be at the 15.35 area. Below, 15.05 will be the frontier.

Palladium down after bouncing at 1,530

XPD/USD is trading 1.50% negative on the day as investors are selling Palladium again following Monday’s bounce from 1,530.

The pair is currently trading at 1,550, in consolidation mode after the unit reached all-time highs at 1,615 on March 21.

To the downside, 1,500 is the level to watch.