Gold, as well as other precious metals, are trading higher today. GOLD trades 0.6% higher on the day while SILVER rallies 1.6% and PALLADIUM surges 2.1%. Platinum is a laggard within the group with a 0.9% drop at press time.
While current gains are quite decent, it should be said that precious metals have pulled back from daily highs. GOLD traded as high as $2,078 per ounce during an overnight flash crash on WTI market, reaching the highest level on the record. However, those gains were quickly erased and gold traded in a rather wide range of $2,030-2,060 later on. There is a number of reasons behind solid performance of precious metals with main ones being:
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app- US banking turmoil - a flight-for-safety can be spotted on the markets as problems of US regional banks have been reignited
- PacWest Bancorp and Western Alliance are rumored to be next in-line to collapse after SVB, First Signature and First Republic
- FOMC strongly hinted that rate hike cycle in the United States may be in for a pause after yesterday's 25 basis point hike
- European Central Bank delivered a 25 bp rate hike today and ruled out that it is about to pause. However, wording of the statement was change and no longer strongly hints at need of additional rate hikes
- US dollar is on the back foot with USD index (USDIDX) dropping more than 1% over the past two days
Taking a look at GOLD at W1 interval, we can see that price tested an all-time high area above $2,070 mark and even briefly managed to trade above August 2020 highs. However, looking at a lower time frame (H1), we can see that a double top has been painted in the $2,059 area. Neckline of the pattern can be found in the $2,032 area and should we see a break below it, textbook range of a downside breakout points to a possible drop to as low as $2,005 per ounce. Nevertheless, should more worrying news from US banking sector surface, gold could benefit from safe haven bids and once again looks towards $2,070 area.
GOLD at W1 interval. Source: xStation5
GOLD at H1 interval. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
