Gold prices started climbing steadily from the low of March 31, which came around $1680, but the momentum came when prices broke the psychological resistance of $1800 which saw short covering. After that, for a week, prices consolidated but are now moving up, breaking its immediate resistance of $1852 in COMEX. May 17’s gains ($29 rally) indicate that gold, at least for now, no longer remains range bound and has broken above its strong resistance level which occurred at approximately $1852, the 200-day moving average. Now Gold is trading at 4-week high on COMEX. The threat of rising inflation, coupled with economic uncertainty following disappointing US employment and retail numbers is prompting investors to find safe-haven assets again. Gold tends to outperform when economic data is weakening and underperforms when economic prospects improve. Falling of cryptocurrency market also helped gold in giving strong rally. Hedge fund managers have started increasing their speculative lo
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Silver saw sharp fall on Tuesday as market was caught by surprise after Treasury Secretary Janet Yellen conceded that interest rates may have to rise in order to contain inflation. These comments came after 48 hours where she downplayed rising inflation pressure thus creating confusion. The comments prompted US dollar to soar while precious metals saw sharp fall. The way US economic recovery is gaining pace, market is now factoring that ultra loose monetary policy may not remain same in foreseeable future and interest rate rising may come next year. Physical demand in India has also taken hit after severe second wave of Covid with many states imposing restrictions and lockdown. Premium for physical gold has eroded and now is trading in discount of $2.
Gold market is taking a nap as the bull market has stalled. Bitcoin is replacing gold s role in the portfolio of many investors, and until that changes, gold will have to share its spotlight with the cryptocurrency. Benchmark 10-year Treasury yields rose to 14-month highs on Tuesday at 1.776 per cent and the US dollar advancing against all currencies were the culprit for gold’s decline. US dollar also found support after news of the collapse of highly leveraged investment fund Archegos Capital. Gold was unable to hold its key support level of $1,700 an ounce on Tuesday. Year-to-date, gold is down 12.5 per cent. We don’t believe rising US yields will go out soon. We expect gold to bounce since it is trading near oversold region but we are not bullish in medium term and sell on rise is recommended.
Read more about Trading strategies for crude oil and zinc by Tradebulls Securities on Business Standard. Another surprise build up in US inventory also helped the crude oil prices pushing down below 4,600 but overall trend still is bullish as there is no reversal pattern on daily chart
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