Precious Metals continue to skid

Fundamental News and Triggers

  • Precious metals continue to skid amid weak USD demand. Against the background of dovish Federal Reserve predictions, US President Joe Biden’s withdrawal from the presidential campaign pushes some investors to unwind investments based on a Trump victory.
  • Aside from this, fears about slowing Chinese economic development, geopolitical threats resulting from the extended Russia-Ukraine war, and ongoing crises in the Middle East also boost the safe haven.
  • In today’s budget, the top five expectations from market participants are a reduction in gold import duty, silver duty to be on par with gold under CEPA, unification of the bullion market under a single regulator, and interest income to be made tax-free.

 

Technical Triggers

  • From a technical standpoint, it seems, that Gold gave a false breakout above $2450 (Rs 74000) and has reversed. A bearish “Inverted Hammer” candlestick pattern has been formed on weekly charts. It seems we have seen short-term top for the prices and prices might retrace back in the old range of $2300 (Rs 71000) and $2400 Rs (Rs 73000) next week. On the other side, gold needs to sustain above $2450 to start its new bull run.
  • Silver has broken uptrend line support of $30 on weekly charts, the next very important support is $29. Prices should rebound from here for the bull run to continue further. If $29 (Rs 90000) is taken away, we can see prices falling towards $26.5 (Rs 86500). If we see a reversal this week, Silver needs to sustain above $30 (Rs 90500) to head higher towards $32 (Rs 94000).

 

Support and Resistance

 

 

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