Gold Ready for More Gains; Other Metals Under Pressure

Although technical studies suggest more declines in the middle term, chart pattern still shows a bullish consolidation above the 1,380 area with the 1,440 level acting as a container.
Mauricio Carrillo
Gold Ready for More Gains; Other Metals Under Pressure
Gold Price, Commodities Investment

Gold jumped to test the 1,440 again on Wednesday as investors are digesting central banks related banks in Europe and the United States. Also, investors are waiting for today’s jobs news and Friday employment report in the US.

Central Bank moves in both sides of the Atlantic

The European Central Bank is looking for a replacement of its president Mario Draghi, with IMF chief Christine Lagarde as a firm candidate backed by European Union leaders. Investors are watching the nomination as a move in favor of the monetary policy easing bloc.

In America, US President Donald Trump announced the names of two nominees to the Federal Reserve Board. Christopher Waller and Judy Shelton are the names that Trump is proposing, two easing policies believers and apparently aligned to Trump’s view for rate cuts.

So, more timber! As the great Groucho Marx once said.

Gold is Unstoppable

XAUUSD daily chart July 3

Gold jumped to test the 1,440 area on Wednesday; however, the pair was unable to sustain levels, and it got a rejection that sent it back to trade below the 1,420 and to post losses on the day.

Currently, XAU/USD is trading 0.13% down on the day at 1,416. The move was preceded by an active recovery daily candle performed on Tuesday. Gold was up influenced by news about the nomination of Lagarde as ECB’s Draghi replacement and Trump’s rate-cut believer nominees to the board of the Federal Reserve.

Although technical studies suggest more declines in the middle term, chart pattern still shows a bullish consolidation above the 1,380 area with the 1,440 level acting as a container.

Analyst Nenad Kerkez said in a recent article on FXEmpire that gold is unstoppable with a primary target of 1442. “However, a strong bullish impulse could lead to 1450 and 1456. Only a break below the lower trend line 1390 could make gold neutral again. So far, buying the dip is obvious on intraday time frames.”

If gold can break above the 1,440 area, it will find resistances at 1,445 and 1,490 ahead of the psychologic 1,500 level.

To the downside, 1,400 is the short term support but the 1,380 area to break if gold wants to confirm a bearish continuation. Below there, 1,360 and 1,345 are the levels to watch.

Metals report for July 3, 2019

Silver is turning down on Wednesday after failing to sustain gains above the 15.40 area. Currently, XAG/USD is trading 0.40% negative on the day at 15.25 as the metal fell back to the range between 15.10 and 15.30 it has been trading since June 26.

Copper is extending losses for the fourth straight day, but this time the story looks different as XCU/USD found support at 2.6340 and bounced at that level to trade almost flat on the day at 2.6610. Previously in the week, Copper lost 4.0% plus from Monday highs at 2.7500 to today’s lows at the mentioned 2.6340.

Palladium is quietly extending highs on Wednesday, but the unit is negative on the day. XPD/USD advanced to trade at highs since March 26 at 1,568 earlier in the day, but the pair wasn’t strong enough to sustain gains, and it is now trading back at 1,559, posting 0.22% losses on the session.

Platinum is trading positive on Wednesday for the first time in three days as the unit is extending recoveries from Tuesday’s bottom at 824.45. Today, XPT/USD is trading at 834.65, 0.60% positive on the session.

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