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 Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley