Precious metals, Gold and Silver continue to hold trendline supports

  • Spot Gold was 0.30% higher moving between a range of $1,493.62oz and $1,507.08oz.
  • Silver was 1% higher, moving between a range of $17.75 and $18.08 the high for the day.
  • The gold and silver ratio was lower by 0.72% into the final trading hour on Wall Street.

Precious metals were robust on Tuesday, with spot prices travelling higher between 0.30%-1% ranges on the day. Spot Gold was 0.30% higher moving between a range of $1,493.62oz and $1,507.08oz while Silver was 1% higher, moving between a range of $17.75 and $18.08 the high for the day. The gold and silver ratio was lower by 0.72% into the final trading hour on Wall Street, having travelled from a high of 84.37 to a low of 83.26 as silver continues to play catch up this year. 

The geopolitical tensions around the world continue to favour the precious metals markets. However, the Saudi Arabian oil-infrastructure risks were played down and escalations of a war between the US and Iran are less likely with the announcements that sanctions will be imposed instead. The Saudi Energy Minister claimed that both supply and production will be at full by the end of September. Meanwhile, the futures markets remained bullish, with the December gold on Comex added on $1.90, or 0.1%, to settle at $1,513.40 an ounce, following a 0.8% gain on Monday marking their highest settlement since Sept. 6 for a second straight session. Meanwhile, Silver for December delivery added 11.4 cents, or 0.6%, to finish at $18.14 an ounce, after a 2.6% rally on Monday.

All eyes now on the Fed

Markets will now look to the Federal Open Market Committee and Federal Reserve interest rate decision as the next catalyst for precious metals and the Dollar, which struggled to hold onto gains o Tuesday and was the worst-performing currency on the block. However, with the market nearly fully pricing in a 25bp cut for this meeting, the focus will likely reside on the distribution of the dot plot as June saw a divided committee, as noted by the analysts at TD Securities: 

"With little pushback from Fed members for another cut following this one, we continue to see room for the signaling of another cut in 2019. Further, markets will watch Powell's statement for any mention that the Fed will do what is 'necessary to sustain expansion', which was previously interpreted as a dovish acknowledgement of the need for further cuts, along with the potential omission of the 'mid-cycle adjustment' remark which was scrapped from Chair Powell's Jackson Hole speech. With gold prices still holding north of the $1500/oz range, despite the market significantly pairing back its easing expectations, we expect that further weakness on the economic data front will ultimately catalyze further gains as the path of least resistance for gold and friends remains to the upside. Meanwhile, we expect that trend followers are continuing to increase their length in palladium, as the positive precious metal environment and structural deficits see prices hit all time highs."

Gold levels:

The bearish pin bar and subsequent negative close at the end of the week painted a compelling bearish case on the daily chart which has so far not played out and instead, the price is respecting the ascending trend line support which keeps the 1500 handle in play. However, a 50% mean reversion of the late June swing lows to recent highs around 1470 guards the 19 July swing highs at 1,452.93. The 1,550 level is still the target to breach which then opens prospects for 1,590 as the 127.2% Fibo target area. 

Silver levels: 

Technically, Silver has moved into a breakout point between trendline support and resistance converging around18 the figure.  On the upside, bulls can look to a break towards the September highs of 19.64, which n the downside, bears can look to the 16.50s. 

Support levels: 17.76 17.04 16.70

Resistance levels: 18.14 18.81 19.20


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