By Orbex
Gold
The yellow metal has been firmly lower this week, in response to the rally which has taken place in the US dollar.
It seems that amidst the building fears around a second wave of COVID-19, safe haven flows have gravitated back towards the dollar.
Fresh lockdowns have been announced in France and Germany this week. And there are expectations that other countries, including the UK, will soon follow.
It seems the market is shifting back towards the dynamic seen during the height of wave one of the pandemic. Then, too, equities and gold fell in tandem as the dollar traded higher. Interestingly, the dollar looks to also be deriving some support from better recent polling results for Donald Trump.
The US president has seen a small increase in his national rankings over recent days. He has also made gains in battleground states, with Florida now switching in favor of Trump.
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Download Our Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
At the very least, the dollar looks to be gaining on the reduced likelihood of the Democrats gaining control of both the Senate and the White House.
As we head through to the elections next week, the market will become highly sensitive to polling results. And we can expect plenty of volatility in reaction to the elections, regardless of who wins.
Gold Reverses From Key Resistance
Gold prices have once again turned lower from the 1919.92 level which continues to act as a firm resistance. While below here, we can expect a test of the 1826.71 level.
Bulls will need to defend this level to keep the medium-term view bullish. A break below there would affect a shift in view towards gold.
Silver
Silver prices have been knocked lower this week also. The metal has been weighed upon not only by the downside moves in gold and upward action in the US dollar but also by the sell-off in equities markets.
Last week’s manufacturing readings showed that the factory sector has seen a heavy loss of momentum in the UK and the US. This raises concerns over the demand outlook for silver in the near term.
With European countries now starting to move back into lockdown, the outlook for silver doesn’t look too encouraging here.
Silver Turning Lower Again
Silver prices have once again failed to break above the 25.1018 level resistance. And, while below there, the market remains vulnerable to a further move lower towards the 20.4050 level next.
To the topside, any break back above the 25.1018 level, will turn attention back to the 27.4502 level next.
By Orbex
- TSLA shares rose on a weak report. Inflationary pressures are easing in Australia Apr 24, 2024
- USDJPY: On intervention watch Apr 24, 2024
- Euro gains against the dollar amid mixed economic signals Apr 24, 2024
- PMI data is the focus of investors’ attention today. Turkey, Iraq, Qatar, and UAE signed a transportation agreement Apr 23, 2024
- Australian dollar rises on strong economic indicators Apr 23, 2024
- Geopolitical risks in the Middle East are declining. China kept interest rates at lows Apr 22, 2024
- Brent crude dips to four-week low amid easing geopolitical tensions Apr 22, 2024
- COT Metals Charts: Speculator bets led by Copper & Silver Apr 20, 2024
- COT Bonds Charts: Speculator bets led by 10-Year Bonds & Fed Funds Apr 20, 2024
- COT Stock Market Charts: Speculator bets led by S&P500-Mini Apr 20, 2024