Precious Metals retreat from record highs

Fundamental News and Triggers

  • After reaching an all-time high of $2488 (74730), gold prices fell as speculators booked profits and investors were unable to hold onto their gains. This boosted flows to the US dollar coupled with former US President Donald Trump’s threats to impose at least 60% tariffs on Chinese goods.
  • In the meanwhile, there are questions about the US’s willingness to protect Taiwan in the case of a Chinese invasion after former President Donald Trump stated that Taiwan should foot the bill for US defence. This adds to the geopolitical unrest brought on by the Middle East crises and the extended war between Russia and Ukraine, which should help Gold.
  • However, the FedWatch Tool from the CME Group shows that markets are pricing in a 100% likelihood of a rate decrease in September and an extra two cuts by yearend.

 

Technical Triggers

  • Gold prices have reversed from $2488 (Rs 74730) and have formed an “Inverted Hammer” candlestick pattern on weekly charts. Important support on the uptrend line from February lies around $2350. Until prices are sustained above this level, we could see the bull run continuing
  • Silver touched $32 (Rs 94500) and then retraced back below $30 (Rs 91000). Next support lies around $29.40 (Rs 90000).

 

Support and Resistance

 

 

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