Gold began the week on the front foot, finding renewed buying interest on fading risk appetite. Investors poured back in to push up prices after gold suffered its worst weekly drop since November.
The trigger for this morning’s bounce was Moody’s US ratings downgrade late on Friday which led to a sell-off across US stock index futures along with a sharp drop in the US dollar, even as bond yields jumped. The gold price is well off last Thursday’s low of $3,120. But it is once again butting up against resistance around $3,250.
The daily MACD continues to pullback from the seriously overbought levels seen this time last month, and is now approaching neutral territory. Gold may need to consolidate further before it can build enough upside momentum for another serious leg higher. But today’s price action looks promising for the bulls, while it is too early to suggest that the selling is over.
Source: TN Trader
Silver was also firmer this morning. Despite this, it is stuck in a range, roughly between $32 and $33 per ounce. The daily MACD is trundling along at neutral levels, so giving no clear signal as to where silver could go next.
Still, both precious metals are clearly responding to the change in tone across markets and benefiting from the renewed flight to quality.
