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Gold and silver prices are down against strengthening US dollar

Gold and silver prices are slightly lower in early US trading Thursday.

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Gold and silver prices are slightly lower in early US trading Thursday. February gold futures were last down 1.40 USD per ounce at 1,292.50 USD. March Comex silver was down 0.083 USD at 15.555 USD per ounce.

The price of gold lost some value in US dollars terms in the last hour as the greenback was able to record modest gains on the back of upbeat macroeconomic data releases. After advancing to the 1,295 USD earlier in the day, the price of gold edged down to 1,290 USD area, where it was down by 3.50 USD on a daily basis. Despite this recent price action, however, the pair continues to fluctuate in its two-week-old range, preserving its near-term neutral outlook.

Gold is trading above the main SMAs but currently capped by the 1,297 USD resistance.

With a decisive break above 1,298-1,300 USD (January 4 high, which is important psychological level) the pair could target 1,303 (June 15, 2018, high) and 1,309 (June 14, 2018, high). On the downside, the gold may receive support at 1,287-1,285 USD (January 15 low and 20-DMA), 1,280 USD (January 9 low) and 1,276 USD (January 4 low).

Gold futures

However, if bearish momentum is to return below 1,300 USD, the 1276.71 USD makes a suitable counter-trend target. Even if it were to retest the 1265.96 USD, the trend would remain technically bullish. Only a break below 1232.99 USD invalidates the current trend structure. Therefore, we’d expect any downside being corrective at this stage and for bulls to have another crack at 1,300 USD.

Silver price analysis

Silver has already started to exhibit bullish characterizes again in recent times. The metal has not given up much of its recent gains despite the dollar staging a sizeable comeback, suggesting silver is showing relative strength. The next levels of potential support below market are around 15.20 USD and 14.85 USD, levels which were formerly resistance.

There is obviously the potential that silver may not get to these levels before taking off again. So, watch price action closely around 15.50 USD. If the low from last week breaks, which it has, and silver refuses to go down, then this would point to a potential bear trap situation. Thus, if silver now starts to go back above 15.50 USD and show bullish characteristics on the smaller time frames then move towards the high of next week could begin, so watch out for that possibility.

Palladium continue its uptrend

Palladium rose to its highest level in history after reaching levels of 1,364.80 USD per ounce, well above the gold price. Earlier this morning, the white precious metal was traded at 1,362 USD per ounce.

Palladium rose nearly 3% yesterday, trading well above its 200-day moving average. In December last year, palladium exceeded the price of gold for the first time in 16 years.

The rise of palladium price is extremely and one-way. In August last year, the price of the precious metal was at about 900 USD. Only five months later and its price is 50% up.

The analysts expect that in long-term the price of palladium will continue to grow. However, in short-term might have some speculations and corrections.

Still, investors in palladium should be very careful. The precious metal trades 30% above its 200-day moving average, as well as nearly 12% above its 50-day moving average, which may be a sign of its overpricing.

Worse for investors in palladium, however, is the far higher ratios in which the white metal is traded compared to other precious metals such as platinum and gold.

And although platinum is primarily affected by its use in diesel catalysts, some experts say it can be seen as a substitute metal. The only problem is that it will take about two years for manufacturers to adapt to the use of platinum in gasoline vehicle catalysts instead of palladium. Still, given that palladium is more than 50% more expensive than platinum, this may not be a bad alternative to manufacturers.