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Palladium Down To 1,500, Dollar Up While Silver Mixed Amid Volatile DXY

By:
Mauricio Carrillo
Updated: Mar 27, 2019, 13:22 UTC

Gold and silver are trding positive to sideways on Wednesday, while the news is on Palladium, which is testing the crucial 1,500 support.

Palladium

Gold and silver are trading positive on the day amid a current weak dollar, but gains are limited as the market is waiting for a catalyzer.

Palladium is falling again, and it is now testing the 1,500 support. Silver recovered early losses, and it returned to the range to post gains on the day.

It seems that precious metals are waiting for “perfect storm of lower yields and falling stock prices,” as FX Empire analyst James Hyerczyk said in a recent article, to break in any direction.

In my opinion,” Hyerczyk said, “it is going to take the perfect combination of weaker Treasury yields and a steep stock market sell-off to trigger a breakout to the upside in gold. If stocks continue to rise along with yields, then look for a rangebound trade.”

Dollar index knocked out by a Fed nominee

DXY rallied earlier in the day to test the 97.00 level; however, the unit wasn’t able to sustain gains, and it returned below 96.80. A report from the New York Time saying that Trump’s Fed nominee Stephen Moore is a firm believer of an immediate 50 basic points rate cute is pressuring the Dollar index down.

“Mr. Moore said Tuesday that he regretted his remarks about Mr. Powell, but defended his view that the Fed was wrong to raise interest rates in September and December,” the New York Times’ reports. “He said the Fed should immediately reverse course and cut rates by half a percentage point.”

The dollar index is currently trading at 96.65, 0.12% down on the day. The pair is looking for the 96.50 as support and the 50-day moving average as a buying zone. It is fueling gold prices to the upside.

Gold positive on the day, but 1,312 seems like a good support

XAUUSD daily chart Gold March 27

Gold is trading positive on Wednesday amid a weak dollar and falling treasury yields. The pair is recovering Tuesday losses, and it is now trading 0.20% positive on the day at 1,320.

XAU/USD seems to have found substantial support above 1,310, where the pair bounced yesterday, and it posted intra-day lows on Wednesday.

Performance indicates investors indecision and impending volatility. “The plunge in Treasury yields along with weakening U.S. economic data appears to be enough to provide support for gold prices. This is leading to steady hedge demand for gold,” Hyerczyk comments. “What this market is lacking is a catalyst to trigger a breakout to the upside.”

To the downside, a break below the 1,310 level would suggest more bearishness with the 1,305 area as a target. Below, check the 1,300 as support. Remember that there is a dynamic line coming from March 7 that is acting as a support of the current middle-term uptrend.

To the upside, a break above 1,320 will open the door for fresh highs above 1,325. Above, check for 1,330 and finally 1,345 as the frontiers.

Silver trades mixed between green and red numbers

XAGUSD daily chart Silver March 27

Silver is trading sideways on Wednesday as investors are watching a volatile dollar. The pair managed to recover early gains from 15.35; however, the recovery faded at 15.50, and it is now trading back at 15.40, flat on the day.

XAG/USD is currently trapped between the 50-day moving average at 15.57 and the moving average of the last 20 days at 15.33.

Technically, the pair looks overbought and a short-term decline seems possible. Studies are deteriorating, and a shift in the trend could lead to sustainable losses.

Palladium declines again and tests 1,500 support

Palladium is trading falling for the second day in a row, and it is now testing the critical support at 1,500.

As for the moment, XPD/USD is holding levels above 1,500, but the short movement looks strong and the market is expecting more declines. Below the mentioned 1,500 level, traders will find stop losses triggers that will push the pair deeper.

Next support is at 1,460. Then 1,440.

About the Author

Mauricio is a financial journalist with over ten years of experience in stocks, forex, commodities, and cryptocurrencies. He has a B.A and M.A in Journalism and studies in Economics by the Autonomous University of Barcelona. While traveling around the world, Mauricio has developed several technology projects focused on finances and communications. He is the inventor of the FXStreet Currency Poll Sentiment index tool.

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