Gold ease off the previous session’s one-week peak, as the US dollar regained momentum as the preferred safe-haven from uncertainty over Sino-American trade war, while weakness in equity markets limited losses for the metal.
The price of spot gold was down by 0.2% at 1,282.73 USD per ounce by 08:00 a.m. ET, having touched its highest since May 17 at 1,287.32 USD per ounce in the previous session. Meanwhile, the US gold futures were 0.1% lower at 1,282.80 USD per ounce.
The gold market is clearly lacking direction at the moment. There is uncertainty in financial markets, which is positive for gold, but the commodity continues to face headwinds from a stronger US dollar. A higher US dollar index and firmer stocks are putting downside pressure on the gold and silver markets.
Limiting gold’s declines, however, were concerns about the budget deficit in Italy, which weighed on European shares, with broad uncertainties over trade and economic growth denting investor enthusiasm towards riskier assets. Also supporting bullion were increasing bets on an interest rate cut by the US Federal Reserve, following a couple of weak economic readings from the United States late last week.
Lower interest rates tend to be supportive for the gold, as it reduces the opportunity cost of holding the non-yielding asset.
Signals are mixed for spot gold as it failed twice to break resistance at 1,286 USD per ounce. From a technical point of view, we would have a first positive signal above 1,290 USD, with space in this case for further rallies to 1,300 USD, while the first support levels are placed at 1,270 USD and 1,266 USD.
Among other precious metals, silver slipped by 0.7% to 14.48 USD per ounce, hitting a six-month low. Platinum edged 0.5% up to 809.73 USD, while palladium climbed 0.7% to 1,345.90 USD per ounce, after earlier reached its highest since May 15 at 1,349 USD.
Gold price analysis
The price of gold is dropping sharply to around 1,277 USD, around 8 USD on the day and falling back to levels that were seen last week. The sell-off in the precious metal is not correlated to any other market movement. American and British traders return to their desks after a long weekend.
The commodity dropped below the 50- and 100- Simple Moving Averages but momentum remains positive. The Relative Strength Index is leaning lower — but also holds above 30, not reflecting oversold conditions.
Technically, the gold bears still the overall near-term technical advantage. Prices are in a more-than-three-month-old downtrend on the daily bar chart.
The bulls’ next upside price objective is to produce a close in June futures above solid resistance at 1,300 USD per ounce. First resistance is seen at last week’s high of 1,287.10 USD and then at 1,290.00 USD.
Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the May low of 1,267.30 USD per ounce. First support is seen at 1,275.00 USD and then at Thursday’s low of 1,272.10 USD.
Silver price analysis
July silver futures bears have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart.
Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at 15.00 USD per ounce. First resistance is seen at 14.50 USD and then at last week’s high of 14.635 USD.
The next downside price breakout objective for the bears is closing prices below solid support at the November low of 14.175 USD. Next support is seen at 14.25 USD and then at 14.175 USD.