Metals Market Corrects As Risk Sentiment Improves
The metals market has started the week on softer footing as risk sentiment rebounds amidst very cautious optimism over a potential truce between Ukraine and Russia. Following further peace talks, both sides have indicated hopes for a resolution over the coming week. While it is not yet known if any such solution (it if happens) will be temporary, the prospect of an end to the bloodshed in Eastern Europe has been welcomed by traders.
Gold prices have now corrected more than 5% from their recent highs around the 2060 mark. Price is now trading back down at the 1980.66 level, retesting the broken bull channel top. If any ceasefire or resolution is agreed this week, metals prices are likely to be much lower as risk sentiment rebounds further, though silver will likely remain more buoyant given its links to equities. However, should talks fail or if we see any escalation in the violence, this will likely see risk sentiment reverse sharply lower, leading metals higher once again on safe-haven inflows.
Away from the crisis in Ukraine, metals traders will this week be focusing on the March FOMC meeting. The Fed is widely expected to lift rates by .25%. With last week’s CPI print failing to deliver any meaningful upside surprise, there is little to suggest a bigger .5% hike. With this in mind, focus will be on the latest set of forecasts and guidance from the bank, with traders keen to see if the Fed has upgraded its rates path projection.
Technical Views
Gold
The correction lower in gold has seen the market trading back down to retest the 1958.82 level and broken bull channel top. With both MACD and RSI still bullish, while this level holds as support, the focus is on further upside near term. Below there, however, focus shifts to deeper support at the 1919.92 level and 1871.04 below.
Silver
The test of the 26.5711 level in silver has seen the market trading back down to 25.5384 as of writing. With both MACD and RSI still bullish here, the focus is on further upside while price holds above this level. However, should we see price slip back under here, the next main support is down at 24.0073.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.