Silver To Highs and Bullish MA Crossover, Gold bounces back on IMF

Precious metals are trading positive on Wednesday as investors are watching economic and geopolitical factors. Dollar is weak on the day.

Gold is finally trading positive after three negative days, while silver and platinum have jumped to fresh highs. The Gold/silver ratio is felling for the eighth straight day.

What is affecting metals now

As the dollar is one of the main factors in gold fluctuations, a decline on Wednesday is pushing gold prices up. DXY is currently trading at 0.05% negative at 97.65, in a move which is consolidating previous highs at 97.80 reached earlier in the day.

However, what is keeping the dollar weak and metals positive on the day? Besides the consolidation pattern, the International Monetary Fund, IMF, downgraded global forecast growth to 3.2% this year, 0.1 percentage points below than the forecasted in April.

“Dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent U.S.-China trade truce,” said Gita Gopinath, the IMF’s chief economist.

The IMF reports that a sharp deceleration of global trade is happening right now due to the trade tensions. It is slowing the global economy more than initial projections.

In this framework, economic struggles are happening in Europe and other regions. Central Banks around the world are thinking about rate cuts and accommodative monetary policies.

Traders are now in a wait-and-see mode ahead of central banks and economic releases.

“The ECB could cut rates by 10-basis points, but at the very least, the central bank will signal fresh stimulus for September,” FX Empire analyst James Hyerczyk says in a recent article. “A more dovish than expected announcement could drive the Euro lower and the US Dollar higher. This would lead to lower foreign demand for dollar-denominated gold.”

Gold positive after three negative days

Gold is trading positive on Wednesday as the unit found support at 1,414 on Tuesday and it is performing a bounce today. XAU/USD is currently trading at 1,425, 0.55% positive on the day.

A gain today would be the first positive daily candle in the last four sessions after the unit rejected the 1,455 high on July 19. The 20-day moving average seems to be supporting the price with investors keeping an eye on central banks and worries about global economic growth.

Technical conditions are mixed on Wednesday with the unit testing an immediate resistance at 1,430. Above there, 1,440 and the mentioned 1,455 as next selling zones.

To the downside, XAU/USD needs to break below the 20-day moving average at 1,410, before testing the 1,400 area. Below there, 1,380 is the frontier.

Silver jumps to fresh 1-year highs, MA significant crossover

Silver is trading positive on Wednesday as the unit is attempting new highs after reaching its highest levels since June 2018 at 16.60. Also, a significant crossover of Moving averages is happening.

XAU/USD is trading positive for the third day on Wednesday as bulls won the battle for the 16.00 level and it is pushing highs to 16.60. Currently, silver is trading 1.05% positive on the day at 16.56.

Technical conditions are favorable and suggest more room for the upside. Besides, a moving average bullish crossover between the 50 and 200 MA is happening right now around 15.07.

In the case silver can maintain current levels, it will find next resistances at 16.75, and 17.00. Then, XAG/USD will test the double top at 17.35.

Platinum broke above the 860.00 level and posted 1.70% daily gains to trade at 870.45, its highest level since May 8, 2019. Technical conditions suggest more gains in the short and middle term.