Fundamental News and Triggers
Gold and Silver retreat from highs on margin increase
- Gold and silver experienced the biggest volatility, plunging more than $200 and $12 in a single day from their highs, respectively. The severity of silver’s slide was exacerbated by the CME’s decision to boost overnight margin requirements to $25,000—the second rise this month. This modification most likely caused forced liquidations among leveraged traders, resulting in position closures independent of individual market outlooks.
- Following a meeting between the presidents of the United States and Ukraine at Mar-a-Lago, there was some tentative hope about prospective peace negotiations. However, this cautious optimism was dashed when Russian President Vladimir Putin notified President Donald Trump on Monday that Moscow would reconsider its negotiation position following what the Kremlin described as a Ukrainian drone strike on a Russian presidential palace. This conflicting geopolitical signal added more anxiety to an already tumultuous trading session.
- Separately, Trump threatened of future strikes against Iran if nuclear development proceeds, while also revealing that the US has hit a drug-related facility in Venezuela.
Technical Triggers
- Gold prices are expected to consolidate in the range of $4300 (~Rs 134,000) and $4400 (~Rs 136,500) after this sharp sell off.
- Silver prices are expected to consolidate between $70 (~Rs 223,000) and $75 (~Rs 237,000), after the sharp sell off.
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