Metals fake-out to the downside; Opportunity? – Gold (XAU/USD) & Silver (XAG/USD) update

Metals have been responding very unusually to the latest and ongoing US-Iran-Israel conflict, initially spiking higher but failing to withstand the pressure that followed.

What is bothering Metals, as with virtually all other assets on the Market except for Crude and its beloved Petrodollar, is that supply tensions in Energy are known for their long-lasting effects on inflation.

And while inflation helps metals shine bright over the long run, when rate expectations are repriced higher, non-yielding assets face trouble.

This morning was yet another example of this, with Oil gapping higher at the Globex open and Gold, Silver, and other precious metals turning lower.

The weird price action now gets even weirder when you see that a progressive easing in Oil and the US Dollar only briefly helped metals rebound.

Gold now fragilely holds around $5,000 (after briefly crossing below the key level), and Silver is doing the same, this time around $80.

A few alternatives that have held well are Copper and Platinum, both of which remain strong despite the broader context in the Commodity Market.

We will explore their technical levels during tomorrow's Metals update.

The million-dollar question remains the same:

Are such corrections in the midst of a rough conflict opportunities to buy-dips or not?

One risk of being long metals is that if the "fact" of war brings in some profit-taking, players who bought them as Safe-Havens won't have many reasons to hold such positions; that is, as long as the conflict doesn't escalate to something much worse.

The broader de-dollarization context remains, but this could already be a trend of the past, given recent reactions to the new Fed Chair, Kevin Warsh (who has yet to be officially nominated) in end-January.

Let's tackle the intraday charts and levels for both Silver (XAG/USD) and Gold (XAU/USD) to see if today's downside fakeout could help the case for some dip-buying or if technical red flags have emerged.

Read More:

• A test of confidence for Stocks – Dow Jones and US Index Outlook
• Monetary policy in focus, WTI hovers around $100 & week ahead
• Markets Today: Chinese data positive as Middle East conflict remains tense. Oil steady, FTSE 100 consolidate. Canada CPI up next

Pre-FOMC flows can be tricky and this is exactly what is arising from this price action.

Having broken the key $5,100 Pivot, technicals for the metal are now increasingly more mixed, but are still further from bearish territory.

This provides decent scenarios for breakout plays:

• Rebounding from here would maintain the $5,000 to $5,200 range
  • Some bullish plays above the 200-period MA ($5,080) would be sensical
• Any break below $5,000 however could quickly open the door towards the Mid-Feb lows around $4,850

Levels of interest for Gold trading:

Support Levels:

• $5,000 Mini-Support
• $4,850 to $4,900 Support (Mid-Feb Lows)
• Pivotal Support and December record $4,400 to $4,500 (Bearish below)
• Channel lows $4,200

Resistance Levels:

• $5,100 Major Pivot (broken, Bullish above)
• $5,250 March Resistance Zone (+/- $25)
• $5,400 Wartime Resistance
• Current All-time Highs Resistance – $5,500 to $5,600

Silver is now looking more grim than its Yellow-counterpart.

Having failed to hold the upper bound of its 2025 bull channel, the precious metal is now well into a mid-term bearish momentum – It's lower bound is at $66 for now, close to the February lows.

For short-term traders, keep a close eye on the intraday bear channel that has recently arisen.

• Breaking $80 on the session could bring more downside ahead.

Levels of interest for Silver trading:

Support Levels:

• Pivotal Support $80 to $82 (testing)
• February Momentum Support $76 to $77.50
• Major 2026 Support $70 to $72
• 2025 Channel lows $66

Resistance Levels:

• Intraday Channel highs $81.50
• Main Pivot $84.50
• Mini Resistance $87.50
• $96.47 March highs
• Key psychological resistance $100 to $104

Safe Trades and keep a close eye on the US-Iran developments!

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