Gold and silver gave up much of their earlier gains. Questions remains as to whether precious metals will be able to rise significantly from here in this macro environment.
Although the case for peak inflation has grown, the fact that interest rate increases are not yet pausing in the US and elsewhere means holding zero-yielding gold and silver represent an opportunity cost for foregoing fixed interest you would earn by holding government debt.
In addition to a still-hawkish Fed, there are also concerns over demand from China, one of the world’s largest consumers of precious metals.
But we will discuss the fundamentals in greater another time. I wanted to highlight the fact that it couldn’t reclaim the 200-day average as it found strong resistance from the 21.24 to 21.40 area, which was previously support and resistance.
Silver needs to go above this zone if it is to encourage fresh technical buying in the days ahead. Otherwise, a move back down to the base of the breakout round $20.00 or $19.50 could not be ruled out in the next few days.
By Fawad Razaqzada on behalf of FOREX.com
Although the case for peak inflation has grown, the fact that interest rate increases are not yet pausing in the US and elsewhere means holding zero-yielding gold and silver represent an opportunity cost for foregoing fixed interest you would earn by holding government debt.
In addition to a still-hawkish Fed, there are also concerns over demand from China, one of the world’s largest consumers of precious metals.
But we will discuss the fundamentals in greater another time. I wanted to highlight the fact that it couldn’t reclaim the 200-day average as it found strong resistance from the 21.24 to 21.40 area, which was previously support and resistance.
Silver needs to go above this zone if it is to encourage fresh technical buying in the days ahead. Otherwise, a move back down to the base of the breakout round $20.00 or $19.50 could not be ruled out in the next few days.
By Fawad Razaqzada on behalf of FOREX.com