Home News Commodities Gold prices fell slightly on Thursday as investors’ risk appetite returned

Gold prices fell slightly on Thursday as investors’ risk appetite returned

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Gold prices fell slightly on Thursday as the US dollar gained ground following more dovish sounding from central banks.

The spot gold prices inched down 0.3% to 1,304.80 USD per ounce, having touched a one-week low earlier in the session, mainly pressured by the rising US dollar and stronger equity markets.

The US gold futures were down by 0.4% to 1,304.40 USD per ounce.

The US dollar rose against rival currencies following dovish comments from the European Central Bank and the Reserve Bank of New Zealand. A stronger greenback makes dollar-denominated metals more expensive for holders of other currencies.

Meanwhile, the Commerce Department reported on Wednesday that the deficit in trade saw a major reduction in January, over 6 billion USD more than forecast. The figures indicate unexpectedly positive trade activity in the midst of a brutal trade war which has impacted international industries.

Among the other precious metals, silver wiped out 0.6% to 15.20 per ounce, while platinum fell by 0.5% to 843.84 USD per ounce.

Meanwhile, the palladium hits low of 1,410.71 USD per ounce, which is weakest since February 15. Palladium fell by 2% to a six-week low on Thursday, extending the previous day’s losses as concerns that an economic slowdown could dent demand helped push the metal through key technical levels after a rally to record highs. Prices now down more than 200 USD per ounces from last week’s record high.

Gold price analysis

Gold has broken a bear flag after topping and testing at the 1,318 USD level which is also the 61.8% of the last leg down. Now that we have finally broken with the bear flag the immediate level of importance is 1,291 USD area which is a previous base and the POC of the last leg up. Big volume was traded here and it{s very likely that buyers are going to be positioned her as well as sellers exiting their shorts.

gold futures

The precious metal may also simply be feeling the effects of yesterday’s selloff following the four-week high reached on Monday, a situation in which a profit-taking pullback is often to be expected.

If Gold breaks with the 1,292-1,290 USD level we can see a possible run to test the bottom of the bull channel. If this happens the main areas we will be looking at will be the 61.8% retracement of the move up at the 1,230 USD level which also confluences with the 161.8% retracement of the last leg up, but most importantly the POC of the entire move to the downside at the 1,224 USD level.

Palladium price analysis

The price rally of the palladium has been very speculative-driven and with the technical outlook changing somewhat after the break below 1,500 USD, the speculative interest was reduced. From a technical perspective, the next major level is another 100 USD lower at 1,316 USD per ounce.

The metal, which is used extensively in the making of catalytic converters in vehicles, has already shed about 200 USD from a record peak of 1,620.52 USD hit last week. It breached its 55-day moving average at around 1,453 USD per ounce for the first time since August on Wednesday.

Some analysts also attributed Wednesday’s sharp sell-off to comments by Anglo American chief executive Mark Cutifani, who said palladium was a “bubble” and car makers, who account for 80% of demand, could replace the metal with cheaper platinum.

Earlier, there were warnings that palladium prices could not sustain their high levels, particularly as car sales have weakened in key markets including Europe and China, meaning manufacturers may need less metal.