Dollar Strength Cannot Curtail Silver and Palladium's Upside Spike
Goldprices traded higher on the day, although theywere limited by a stronger U.S. dollar. The same cannot be said for silver and palladium. Although goldgained 0.21% on the day, those gains were dwarfed in comparison to silver’s2.43% and palladium’s 2.11% daily gain today.
Silveropened above its 200-day moving average for the first time since February 1 ofthis year. Although, in the case of silver, the 200-day moving average remains abovethe 50-day moving average, today’s $ 0.41 is more than respectable, and in factthe most significant percentage gain ofany of the precious metals today.
Palladiumcontinues its dramatic ascent which began on April 6 when prices hit a low of$890 per ounce. In just eight trading days palladium has gained over $137,which is a net increase of over 13%. Concern over supplies continue to be incredibly supportive of palladium pricing.Russia is the largest producer of thisprecious white metal. Palladium pricing is now well above platinum, which is currently fixed at $944 per ounce.
Recentprice swings in palladium and today’s uptick in silver clearly indicate that these two precious metals are trading to adifferent set of variables than gold. Both precious white metals arewidely used in industrial applications, andthere are concerns about the supply-side. The strong global economies havecreated an increased demand for theindustrial metals as seen in nickel and aluminum pricing which rallied to amulti-year high in London today.
Goldfutures (June 2018 Comex contract) is currently trading at $1,352.20, which isa net gain of +0.20 % ($2.70). This contraction of gains compared to the other precious metals clearly illustrates that gold is perceived predominantly is a safe-haven asset.
Accordingto Rachel Koning Beals of MarketWatch, “Moderatingpolitical risk contributed to rangeboundtrading for gold after it was announced thatSouth Korea and North Korea would hold talks to potentially change adecades-old armistice into a peace agreement, and as U.S. officials confirmed atop-level meeting with the North Korean leader.”
Moderatingpolitical risk, plus reduced geopolitical tensions now that the United Statesand its allies have concluded a one-day military operation in Syria, clearly have dampened the safe-haven appeal of gold.
Althoughgold has gained over the last four trading days, and today’s pricing includedboth a higher high and a higher low than theprevious session, pricing remains range bound with minor resistance at $1,356 and majorresistance at $1,365.
Goldhas traded to $,1365 on multiple occasions. However,it has been unable to sustain a move above that price point since thefirst unsuccessful occurrence in September 2017. Since that time gold hasfailed to close above that on three more occasions.
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Wishingyou as always, good trading,
By Gary WagnerContributing tokitco.com
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gary@thegoldforecast.comwww.thegoldforecast.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.