Gold fails again. Warning signs on Silver.

Gold rallied initially overnight on risk aversion ahead of the Trump/Xi meeting, only to fail once again at the 200-day moving average which sits at 1259 in Asia today.

GOLD

Gold’s jitters were probably caused by the FOMC minutes discussing the start of the rundown of the Federal Reserve’s balance sheet this year. This should imply higher yields, and although the bond market hasn’t reacted (yet), both equities and gold did, by falling from their highs.

 

1259 and the 1261.50 levels make up initial resistance in gold today, with the 1240 level still the key support as gold trades at 1255 an ounce in early Asia. A break of the 1240 support would be of particular concern to gold bulls now given the multiple failures above.

GoldDaily

 

Silver

We also note that silvers’ magic run higher may be losing some steam in the short term. We note bearish divergence between spot silver and its daily RSI and Stochastics.

SilverDaily

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Jeffrey Halley

Jeffrey Halley

Senior Currency Analyst
Based in Singapore, Jeffrey has over 25 years experience in the financial markets, having traded currencies, options, precious metals and futures. Jeffrey started his career at Barclays Bank in New Zealand. However he has spent most of it in London and Asia.Jeffrey focuses on the Asia time zone across asset classes. A regular commentator on business news TV and Radio, he is originally from New Zealand and holds an MBA from Cass Business School, London.