Gold, Silver Jumps to Highs Amid Positive Metal Sentiment

Gold sentiment is ready to take more gains, but fundamental and technical studies suggest more caution ahead of significant catalysts such as central banks and US economic data.
Mauricio Carrillo
Gold and Silver Jumps to Highs Amid Positive Metal Sentiment
Gold and Silver Jumps to Highs Amid Positive Metal Sentiment

Metals such as gold and silver jumped to highs on Thursday as investors are taking the possible rate cut by the Fed as a bullish event for metals. Silver is rallying as the second option after gold.

Gold down from 2-week highs amid profit-taking

XAUUSD daily chart July 18

Prices of gold are trading down on Thursday as investors are closing positions after Wednesday’s rally. Also, a solid dollar is containing any metal upside.

After a rally on Wednesday which took XAU/USD from the 1,400 area to close at 1,425, the metal extended advances on Thursday to trade at highs since July 3 at 1,430. However, the unit was unable to keep maximums and it turned negative on the day.

XAU/USD is currently trading 0.60% down on the day at 1,420. Technical conditions remain weak and despite the chart pattern suggest a consolidation before a new long run, the metal looks heavy.

As FX Empire analyst James Hyerczyk said in a recent article, “we’re likely to see a lot of two-sided trading over the near-term with the European Central Bank set to meet on July 25, and the Fed on July 31.”

In the same line, Edward Moya, a senior market analyst at OANDA, affirmed in a note that “bullion is likely to see strong support after the Fed’s Beige Book emphasized policymakers’ concern on negative impact of trade uncertainty.”

Long story short, gold sentiment is ready to take more gains, but fundamental and technical studies suggest more caution ahead of significant catalysts such as central banks and US economic data.

Silver extends rally and tests the 16.20 area

XAGUSD daily chart July 18

Silver is trading with a strong positive sentiment on Thursday as investors are welcoming the notion that a Federal Reserve will cut rates and it will benefit metals in general.

Besides, the sideways in the price of gold is giving room for investors to put their money in silver.

On Thursday, XAG/USD extended gains for the fifth day, The unit broke above the 16.00 level and it traded as high as 16.20, maximum since February 27.

Currently, silver is trading at 16.10, 0.90% positive on the day. Technical studies signal more gains, but it will be preceded by a brief period of consolidation. Pay attention to the 16.20 level as it is critical resistance that would open the door for a run to 17.35.

Metals report for July 18, 2019

XCU/USD is trading positive for the second straight day on Thursday as the unit is also taking profit from the positive sentiment in metals. However, Copper remains limited by the 2.7250 resistance.

Technical conditions suggest a period of consolidation between 2.6860 and the mentioned 2.7250. Resistances are at 2.7500 and 2.7580. Supports are at 2.6500 and 2.6100.

Palladium is trading down on Thursday as investors are taking profit from high levels. The unit looks pressured to the downside by the 20-day moving average at 1,548. However, 1,500 is strong support.

Platinum is advancing for the second day with the unit jumping to trade at 853.60, highest level since May 15. Technical studies suggest more room for the upside, but a close above 850.00 is needed. Resistances are at 875.00 and the 900.00 psychologic level.

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