Gold slipped on Thursday, pressured by technical selling after repeatedly failing to breach 1,300 USD this week, though the US sanctions on Chinese telecoms company Huawei dented risk appetite and limited bullion’s losses.
The spot gold was down by 0.2% at 1,294.31 USD per ounce at 06:30 a.m. ET, holding in a relatively narrow range of about 4 USD. The US gold futures were down by 0.2% at 1,294.90 USD per ounce.
the gold made several attempts to rise above 1,300 USD and it appears to be facing some kind of barrier. There is clearly some selling when it hits that level. If, however, the gold overcomes the resistance of 1,300 USD the spot gold is expected to test 1,307 USD and a break above which could lead to growth to 1,322 USD.
The world’s top platinum miners are bracing for a fresh round of negotiations with South African workers as a rise in producer profits is likely to provoke higher wage demands from labor unions including the militant AMCU. Following the news, Lonmin Plc announced that will delay or reduce the number of jobs it had planned to cut in South Africa as soaring palladium prices have boosted revenue, its chief executive said, ahead of a takeover by Sibanye-Stillwater.
China Gold International’s first quarter gold production fell 5% to 44,023 ounces from 46,264, the company reported on Wednesday.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.44 percent to 733.23 tonnes on Wednesday from 736.46 tonnes on Tuesday.
Among other metals, silver edged 0.1% higher to 14.80 USD per ounce while platinum fell 0.4% to 842.65 USD per ounce. Palladium lost 0.6% to 1,336.60 USD and has slumped by about 17% since the metal used in catalytic converters in car exhaust systems scaled a record peak of 1,620.53 USD in March.
Wells Fargo cautions investors in buying gold at current prices
Even though gold has survived the test of time as an excellent safe-haven asset, Wells Fargo is cautioning investors against getting too excited about the metal at current price levels.
“The global gold supply/demand balance also continues to tip in favor of too much supply. Should global volatility continue to spike, gold prices could too, but we doubt that gains can be held”, published the US investment bank.
Indian jewelry demand was 125.4 tonnes in the first quarter of 2019, up 5% from the same period a year earlier, according to data from the World Gold Council. China’s demand was 184.1 tonnes, down 2% from the corresponding quarter in 2018, but it was the third straight quarter of higher demand.
Meanwhile, the supply of gold in Q1 was virtually unchanged, just 3 tonnes lower against Q1 2018 to 1,150 tonnes.
Despite the somewhat pessimistic outlook, Wells Fargo does not project any major losses for gold this year, stating that its 2019 target range is 1,250-1,350 USD per ounce.
At the same time, the bank praised gold’s safety and historic permanence in its note, highlighting its unique characteristics, which make it so appealing to investors.
Gold price analysis
During trading yesterday, gold dropped from 1,296.92 USD to 1,296.25 USD per troy ounce.
This morning it is traded at 1,294.31 USD per ounce.
If today the gold overcomes the resistance range of 1,300.16-1,300.35 USD, it will head towards 1,304.36-1,304.46 USD per ounces. Upon success, the upward trend will continue to 1,307.97-1,308.16 USD.
If the gold fells below the support zone 1,292.54-1,292.35 USD, the next support will be the zone 1,288.84-1,288.74 USD. In case of a breakthrough, the downward trend will continue to 1,284.73-1,284.54 USD per ounce.
Silver price analysis
During trading yesterday, silver rose from 14.76 USD to 14.77 USD per ounce.
This morning it is traded at 14.77 USD per ounce.
If today the silver overcomes the resistance zone of 14.82s USD, it will head towards the zone 14.87s USD. Upon success, the upward trend will continue to 14.91 USD.
If the silver fells below the support zone 14.73s USD, then the next support will be the 14.69 USD area. In a breakthrough, the downward trend will continue to 14.64 USD per ounce.