Gold Sideways, Silver positive as Dollar Caps Upside Potential

Risk aversion is taking the market on Monday. Geopolitical tensions in the middle east are sending oil up and investors are avoiding riskier assets.

However, gold and metals are not taking much profit as dollar index is trading firm.

Dollar index up to test 97.30 area

DXY is extending its recovery from the 96.65 area for the second trading day on Monday as investors are trading in risk aversion mode.

After an opening gap between Friday’s close at 97.05, and Monday’s open at 97.15, the Dollar index is currently testing the 97.30 area. The unit moving at 97.20, 0.50% negative on the day.

Gold opens the week with sideways as it is consolidation Friday’s lows

Gold is trading sideways between 1,424 and 1,427 on Monday as investors are pondering weekend news about geopolitical conflicts between Iran and the United Kingdom and a firm US dollar.

Risk aversion is taking the market due to Iran-UK tensions, and giving the dollar index life, which is containing a gold escalade.

On Monday, gold started the day with gains; however, it quickly returned to trade almost flat on the day at 1,427, where it is now fighting to post some profits.

As mentioned before, XAU/USD is trading around the 1,425 area. Technical studies suggest that the bearish pressure is considerable with the 1,400 area as the first support. Below there, 1,380 is the level to watch.

To the upside, gold needs a close above the 1,440 to recover its mojo. Then it will attack the 1,455 area, which was rejected on Friday. In the case gold breaks above the 6-year high, it will find resistance at 1,480 and then the psychological 1,500 level.

Silver resumes upside on Monday

Silver is trading positive on the first day of the week as investors have retaken bulls positions after Friday’s profit booking and rejection from the 16.60 area to 16.05.

On Monday, silver rallied to test levels above the 16.40 area, and currently, it is trading 1.02% positive on the day at 16.37.

Technical conditions suggest more room for the upside with the 16.60 as the next natural resistance. To the downside, bears need to break below the 16.20 area to start believing in a dovish retracement.

Metals report for Monday, July 22, 2019

Copper opened the week with losses as the unit is extending losses from the 2.800 rejection on Friday. On Monday, XCU/USD was unable to maintain levels around the 200-day moving average at 2.7580, and the metal fell to trade below the 2.7300 level.

Currently, copper is trading 0.40% negative on the day as it is moving at 2.7275. Next supports are at 2.7015 and 2.6815. Below there, 2.6080 is the level to watch.

Palladium is extending losses for the third trading day in a row as the unit is now testing the 1,500 level. XPD/USD is currently trading 0.35% negative on the day at 1,500.

Platinum is resuming its upside after a brief consolidation move on Friday. On Monday, XPT/USD is trading 0.55% positive at 850.40. Technical indicators suggest a potential u-turn in the metal. Be aware.