Gold prices are continuing to trade higher here as the weakness in the US Dollar keeps the safe haven asset underpinned. The Dollar has remained under pressure since the weaker-than-expected retail sales print for April caused a flood of selling. The Dollar has yet to hit a patch of consistently good data and until such time, is likely to remain under pressure. At the end of last week a better than expected set of PMI readings for April stemmed the decline into the weekend.
This week, traders will be looking at the preliminary GDP print for Q2 due on Thursday. If GDP comes in above expectations, this could help fuel a reversal higher in the Dollar, weighing on gold prices. On the other hand, if GDP comes in weaker than expected, gold prices are likely to continue higher as the Dollar sell-off continues.
Away from USD flows, choppier price action in equities recently has also helped buoy gold prices. The collapse in crypto currencies over recent weeks has also driven support for gold and is a theme to monitor this week also.
Silver prices have not been as consistently bid as gold. While the silver market has benefitted from the ongoing weakness in the US Dollar the, declines markets have offset some of this upside impact, creating more volatility in silver than In gold. A better set of manufacturing PMIs from the UK, EZ and US last week has helped keep the demand outlook for silver positive. This week, silver is likely to remain tied to equities with any further declines to act as a headwind for silver.
The breakout in gold prices above the bear channel from last year’s highs has seen the market advancing above the 50% retracement from those highs. With the RSI and MACD supportive, the focus is on a further push higher and a test of the 61.8% retracement next, around the 1900 level, with the 1919.92 level sitting above that as the next resistance to watch.
The bull channel in silver remains in tact for now and with the MACD bullish, the focus is on further upside while price holds above the 27.4502 level. Should price slip back below here however, the focus will turn to support at the 26.5711 level next.
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