Gold Extends Losses at 1,285, Platinum Down to 2-Month Lows

Gold and other metals are posting losses on Friday but the move is contained by trade war events. Palladium is collapsing to 2-month lows.
Mauricio Carrillo
Gold Extends Losses at 1,285, Platinum Down to 2-Month Lows
Gold Extends Losses at 1,285, Platinum Down to 2-Month Lows

Risk aversion is retaking the market as investors are watching developments of the trade war between the United States and China.

But on the other side, economic reports are showing good numbers, so the movements are limited at the moment. Gold, silver, and other metals consolidating Thursday’s declines. Only platinum is posting significant losses.

Silver is extending its drop after breaking below the 14.55 support. Copper trades in a rollercoaster but it remains around 2.7300. Palladium is trading sideways just below the 200-hour moving average at 1,328.

Another trade war chapter

China has accused the United States of “bullying behavior” and to be the reasons for major setbacks in the talks between the two countries about a trade agreement.

“The two sides had open and constructive communication during the 11th round of the China-U.S. high-level economic and trade consultations,” Chinese Ministry of Commerce spokesperson Gao Feng said.

“However, it is regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks,” Feng regrets.

The market is digesting the accusations as another setback in a possible solution in the near term. Both countries are arguing against the other while the markets are suffering.

Wall Street is ready to post losses on Friday, while agriculture futures have been posting significant losses in the last months. The dollar index is testing the 98.00 area after advancing for five consecutive days.

Gold trades down for the fourth day in a row

XAUUSD daily chart May 17

Gold is posting losses for the fourth consecutive day as investors are confident in the global economy and want to buy riskier assets, but the trade war is containing the downside move.

Yes, it is down again, but the losses are not too big, and the metal remains above the 1,280 critical support.

Currently, XAU/USD is trading 0.25% down in the day as the unit is pricing at 1,283. Technical conditions are now mixed, but chart patterns suggest a new test of the 1,280 level. Below there, 1,266 will be the next support.

If the pair decides to make a U-turn at current levels, it will find resistance at the 50-day moving average at 1,290. Then, May 14 highs at 1,303, and April 10 maximums at 1,310.

Platinum extends decline for the third day

XPTUSD daily chart Platinum May 17

Platinum is extending its collapse to 2-month lows after breaking below 200-day moving average at 828.50 and reaching its lowest level since March 12 at 821.99.

XPT/USD is trading negative for the third day with the pair trading 1.4% down on Friday at 822.10.

Since its rejection of the 50-day moving average at 864.50 on May 14, platinum has lost more than 5% of value to current levels.

Technical conditions suggest more declines in the short term. Watch supports and buying zones at March 11 lows at 809.00, then the 800 psychological level and February 14 low at 780.10.

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