Gold and Silver Prospects:
- Gold price is stuck with technical support and resistance around $1,840.
- Silver prices turned down after facing significant resistance at $21.00.
- A stronger US dollar and rising yields remain a prominent threat to the strength of gold and silver.
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Gold and Silver Fundamental Outlook:
Gold and silver prices have benefited from recently released consumer price index data, highlighting persistently high levels of inflation around the world. This means that consumers are expected to pay more for goods and services, reducing household disposable income.
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Major central banks continue to work to curb rampant inflation through higher interest rates, which poses an additional threat to non-yielding assets.
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Trading Forex News: Strategies
Pledges by the Federal Reserve, ECB (European Central Bank) and BoE (Bank of England) to bring inflation back to the 2% target mean ‘sticky’ inflation keeps interest rates rising longer Expectations are rising.
Despite aggressive monetary tightening and rate hikes over the past year, strong economic data is giving policymakers more ammunition to implement further rate hikes.
Source: Refinitiv
A pricing realignment increases the likelihood of a 50 basis point rate hike at the next FOMC meeting, supporting higher yields and a stronger dollar.
This environment does not bode well for safe commodities, as gold and silver are precious metals that do not provide additional income from rising interest rates.
However, the cost of living continues to rise rapidly after falling about 5.43% in February, limiting further losses.
Gold (XAU/USD) Technical Outlook
Gold (XAU/USD) futures bounced off the 100-week moving average (MA) at $1,812 last week, driving the price higher towards the $1,840 resistance.
As this level continues to hold as support and resistance for price action, the 4-hour chart highlights a narrow range of technical relevance that currently holds bulls and bears at bay.
Gold price chart (GC1!) – 4 hours
charter Tammy da Costa Using TradingView
Gold Price Levels – Looking Forward
support | resistance |
---|---|
$1,829.9 (January Low) | $1,840 |
$1,812 (100-week moving average) | $1,850 (psych level) |
$1,800 (psychological support) | $1,880 |
change with |
longs |
shorts |
Oy |
every day | Four% | -Four% | 2% |
every week | Four% | 6% | Five% |
Silver (XAG/USD) Technical Outlook
After briefly testing $21,285 in yesterday’s session, silver futures fell, wiping out 0.84% in today’s session (at the time of writing).
With the 200-day moving average holding just below $21.00 as resistance, the solid body at the top of the current daily candlestick represents a distinct resistance zone around this zone.
Silver Price Chart (SI1!) – Daily
chart creator Tammy da Costa Using TradingView
Silver Price Levels – Looking Forward
support | resistance |
---|---|
$20.50 (psych level) | $20.996 (200 days moving average) |
$20.25 (Fibonacci support) | $21.00 (psych level) |
$20.00 (psychological support) | $21.285 (weekly high) |
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— Written by DailyFX.com analyst Tammy Da Costa.
Contact and follow Tammy on Twitter. @Tams707