Gold Jumps to 1-week Highs, Palladium Up For The Sixth DayGold is trading positive as investors are anticipating a fed’s rate cut that is hurting the dollar. Palladium is up for the sixth day.
Gold is trading positive as investors are confident that the Federal Reserve will cut interest rates next week. US inflation data is giving more reasons to believe in that, hurting dollar appetite.
Palladium is trading at multi-week highs on Thursday as experts are expecting a supply deficit in 2019.
Precious metals report for June 13
XAU/USD is trading positive for the second day as gold is extending its recovery from the 1,320 area priced Tuesday. It is now testing the 1,340 level.
Silver is moving up for the third day in a row, but gains are limited as the unit seems trapped between the 20 and 50 days moving averages at 14.60 and 14.91 respectively.
Copper started the day with declines, but the unit recovered ground later. It is now trading flat with interactions to the negative field. The pair is moving between 2.6270 and 2.6500.
Platinum was unable to break above the 820 area on Wednesday and the unit was sent back to the 810.00 level, where it is trading now. XPT/USD is moving down for the second day in a row with the 20-day moving average acting as downtrend support.
Palladium is extending its gains against the dollar for the sixth day in a row. The pair broke above the 1.400 area and it is extending its escalation to test the 1,440 level, its highest level traded since April 29.
The case for a rate cut
Speculations on a rate cut by the Fed in its FOMC meeting next week are pilling up. Recent inflation data in the United States that showed prices rose less than expected in May are making a stronger case.
According to Julius Baer analyst Carsten Menke, a disappointing US inflation data “reinforced market expectations that the Fed would cut interest rates which itself is a positive for gold and related to that we see some weakness on US dollar today.”
It is hurting the dollar as a rate cut would reduce Greenback’s appeal. It has been trading sideways between the 200-day moving average at 96.50 and the 97.00 level in the last days, but overall, the sentiment is weak.
A weak dollar is allowing gold to add gains, not too much, but the trend is evident with the metal trading near to highs since February.
Gold tests the 1,340 area
After rising 1.5% of value in the last three days from 1,320, June 11 lows, XAU/USD is now testing the 1,340 area as investors are returning to the gold as a safe haven.
Currently, XAU/USD is trading 0.26% positive on the day at 1,336. Immediate resistance is at 1,340, above that, the pair will face the 1,345.1,350 area.
Technical conditions remain firm for a gold bull case, but a short term consolidation period may be expected.
If the pair fails to break above the 1,350 area, it will fall back to 1,320 first, and then the 1,300 area. Below there, the 1,280 and 1,266 are the frontier.