The US Dollar hold sin the 99 handle in the DXY and Gold was once again struggling on the upside and has ended in the US session down -0.53% having travelled from a high of $1507.42 to a low of $1487.10 on a spot basis following stronger US Dollars and US yields and despite lower stocks and risk-off sentiment. Gold for December delivery on Comex lost $8.80, or 0.6%, to settle at $1,506.40 an ounce; This was the lowest finish for a most-active contract since Sept. 19 while the contract dropped 0.6% for the week.
As for the white metal, Silver lost -1.63% into the close on a spot basis, falling from a high of $17.90 to a low of $17.30 while December silver lost 26 cents, or 1.5%, at $17.652 an ounce, for a weekly loss of 1.1%. The gold and silver ratio was higher by almost 1% at +0.97% having climbed from a low of 84.21 to a high of 86.88.
The risk-off news on Friday came in a Bloomberg report that stated that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as one of the options to limit investment which triggered a sell-off in equities and helped to support precious metals which helped them to recover from the session’s worst levels.
Also, easing tension in the Middle East contributed to weaker demand for precious metals.
“The easing of tensions in the Middle East amid a Saudi-Yemen partial cease-fire was eventually the straw to break the camel’s back and catalyze some technical selling as the June trend channel support broke, seeing the yellow metal trade down to the 50dma,”
analysts at TD Securities noted.
“With yesterday’s PCE data fresh in the mind of the market, the YoY reading of PCE will be of keen importance for the precious metals market. However, we still think the Fed needs to provide additional liquidity to the market, by potentially announcing asset purchases and cutting rates next month, which suggests that $1,600/oz gold could be in the cards once optimistic headlines fade and slower growth takes hold,” the analysts argued.
Bears look for a 50% mean reversion of the late June swing lows to recent highs around 1470 ahead of a run to the 19 July swing highs down at 1,452.93. Meanwhile, the 1500 psychological level is giving way, but in a correction higher, bulls can look to the 1535 resistance ahead of the 1,550 target which guards territories towards 1,590 as the 127.2% Fibo target.
Bears closed below the 21-day moving average once again and went on to test the 50-DMA in the session before news lifted prices. Bears will look to break and close below the 38.2% retracement target of 17.50 and then a 50% reversion to 16.80 with the 61.8% down at 16.10. On a run higher, bulls need to break the 17.80s higher and triple-top target of 18.60/80 which will bring in the 19.60s and September highs.