Gold Stays Still As Silver Slides Lower

Gold faces down a resurgent dollar overnight to remain unchanged but silver suffers as it breaks a key technical indicator.

Gold

Gold traded quietly yet again overnight in a seven dollar range but closed in a flat line with the previous days close at 1294.00. Overall, gold continues to consolidate its slow, medium-term gains near to the top of its two-month range.

One positive is that it has shrugged off a stronger U.S. dollar overnight as the U.S. Senate made progress on the tax reform bill. Conversely, gold has not rallied at all after North Korea’s latest missile test of what appears to be a genuinely Intercontinental class of ballistic missile. It further reinforces that the risk-off safe-haven premiums associated with gold are gone for now. This leaves it entirely at the mercy of U.S. yields and the dollar index.

Gold is unsurprisingly unchanged this morning with resistance at the 1299.00/1300.00 zone followed by 1306.50. Support is at the overnight low at 1290.00, followed by the 100-day moving average and Friday’s low at 1285.00.

Gold Daily

The pace of data releases picks up into the 2nd half of the week which will hopefully shake gold from its lethargy.

Silver

Silver did not fare as well overnight as stop losses were triggered sending it lower by 20 cents to close at  17.8500. Having been wedged for the past week between the 100 and  200-day moving averages (DMA), and flirting with its five-month trendline support, this gave way as silver broke the 100-DMA  at 16.9900 sending traders scurrying from long positions.

Like gold, silver has comatose in Asian trading, hovering in a barely discernable 16.8700/16.9100 trading range. With Europe’s arrival, things may get more interesting with the next support at the overnight lower of 16.7700 followed by the somewhat distant 16.5400.

Resistance is now the 100-DMA, today at  17.0000, the trendline at 17.0700 and then the 200-DMA at 17.1270.

Silver Daily

All in all, silver’s price action looks more vulnerable to further dollar strength than gold’s with reasonably significant layers of resistance much closer to current levels then support.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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.