The precious metals market is constantly evolving, and gold, in particular, has been on investors’ minds for a long time. At this moment, technically speaking, an ounce of gold is trading at $2039, practically at this moment, after having reached a historic high of $2081 in the last few hours. However, the daily candle seems to anticipate a strong change of direction at least for the next few days, although the bullish trend that we had marked for several weeks remains valid for the next few hours. As for the bullish levels to keep in mind, the previous high was $2080 and $2,102, while the low is in the range of $2010 and $1958, which are the previous highs from February of this year.
The bullish trend has been very marked in recent times, with indicators maintaining bullish signals and momentum above its middle line with good acceleration, while demand appears to have increased by 64% and the stochastic shows a bearish signal that somehow anticipates significant profit-taking, which does not invalidate the current bullish movement.
The market for precious metals is constantly evolving, and gold has been on investors’ minds for a long time. Currently, technically speaking, the price of an ounce of gold is trading at $2039, almost at this moment, after reaching a historic high of $2081 in the last few hours. However, the daily candle seems to anticipate a strong change in direction for at least the next few days, although the bullish trend we have marked for several weeks remains valid for the next few hours. As for the bullish levels to consider, the previous high was $2080 and $2,102, while the low is in the range of $2010 and $1958, which are the previous highs from February of this year. The bullish trend has been very pronounced lately, with indicators that maintain bullish signals and momentum above its middle line with good acceleration, while demand seems to have increased by 64% and the stochastic shows a bearish signal that somehow anticipates significant profit-taking, which does not invalidate the current bullish movement.
Regarding silver and platinum, these are two metals naturally linked to the production of goods and, in that sense, while they have grown in recent days, they are giving some signs of weakness in the current week. This is not free for the economy, as the Federal Reserve and other central banks are steadily increasing interest rates, which conspires against the growth of these types of metals that are linked to production and consumption. As for the technical analysis of silver and platinum, at this moment silver is trading at $25.65 and has a bullish trend on the daily chart, with a first target at the year’s highs reached last month at $26.
China is the main importer of both, and silver remains close to its highs of the year it reached in mid-April, but is not attempting to surpass them these days, beyond the bullish movement of gold that widened its gap against the ounce of silver and also did so before platinum. Platinum, after reaching highs of the year in mid-April, is falling sharply from $1,135 to the current zone of $1055-$1060, and everything seems to indicate that it has an additional bearish path ahead.
In both cases, the trend is bullish, but perhaps not so much on its own merit but because of the weakness of the dollar, which will accentuate its decline as signals emerge that there will be no new interest rate hikes for the time being. Silver has a doubtful bullish direction, while platinum has a confirmed bearish direction that may be anticipating a new drop in the coming days.
Will there be a breakout due to gold reaching historical highs?
Rebecca Patterson, the former chief investment strategist at Bridgewater Associates, predicted a month ago that the increase in gold prices would persist due to purchases by global central banks and investor demand. During an appearance on “Bloomberg Surveillance,” she stated, “We’re close to an all-time high in gold. I would expect this year it’s going to hit a new all-time high.”
Currently, many safe-haven assets are nearing historical highs, including gold. Why is this happening? From a fundamental perspective, we can trace it back to the banking crisis as one of the major catalysts for this movement. The combination of a weak dollar and the banking crisis, which is mainly focused on the United States, is generating great economic uncertainty. One of the factors affecting the banking crisis is the flight of deposits, which is moving at a spectacular speed. News of the bankruptcy of financial institutions spreads quickly through social networks, making deposits move even faster. In addition, the speed with which rumors spread is also contributing to increasing uncertainty.
At the moment, the banking crisis is mainly focused on the United States, although a few weeks ago, there were also extensions of the banking crisis in Europe. All this is contributing to the weakening of the dollar and, consequently, gold reaching historical highs. It is important to note that the banking crisis is mainly affecting smaller banks, such as Western Alliance Bancorporation, which has suffered a 38.85% drop in its shares. Other banks, such as PacWest, are also retreating quite strongly. It is evident that this contagion effect is present and can affect other financial entities.