Could the Price of Precious Metals Bounce Back?

Cassie Bastien

3/8/2017 10:59:38 AM

Daily Gold & Silver Market Report – 03/08/2017

According to Forex.com, “Market participants have apparently reduced their holdings in buck-denominated Precious Metals.” The question is, is it possible for Precious Metals prices to rebound for the second half of this week? Although the dollar should not weaken after next week's expected interest rate rise, ActionForex.com says, “…there is no reason for it [to] move significantly further higher without a pause at the very least.” In the midst of everything, it is possible for Precious Metals such as Gold and Silver to find support in the event of a stock market correction, but only if the U.S. indices break below significant support levels. Nevertheless, it is possible Gold could drop and test that $1,200 per ounce level again in coming days.

Gold Prices Continue to Drop

With “anticipation of a tighter U.S. monetary policy and the dollar [strengthening] against other currencies,” DailyForex.com Writer Alp Kocak said Gold closed at its lowest since February 2. Given the eagerness of next week's Federal Open Market Committee meeting and the jobs report due out Friday, the dollar has steadily risen. Kocak says, “Trading below the Ichimoku cloud on the 4-hour chart and negatively aligned Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-day moving average, green line) lines, along with Chikou Span/Price cross in the same direction, suggest that the Gold bears have the near-term technical advantage.”

• A Dow Jones industrial average decline below 1205 could trigger further weakness and open a path to 1200-1198.
• Kocak says, “The bulls will have to push the market convincingly beyond 1219 so that they can make an assault on 1225/3.”

Silver Prices are Also On the Decline

Set for its fourth loss in five days, Silver spot price has been on a steady decline on high expectations of an interest rate increase next week. Sam Bourgi with Economic Calendar said “[Silver] prices were down as much as 0.9 percent” earlier Wednesday. “The official rate statement will be accompanied by revised economic projections covering GDP, unemployment and inflation,” causing the U.S. dollar to gain strength amid anxious investors.

• Fed Fund futures prices imply a nearly 82 percent chance of liftoff, CME data show.
• The next Federal Open Market Committee meeting is scheduled for March 14-15.
• The dollar index edged up 0.1 percent to 101.9, putting it on track for its third consecutive advance (EconomicCalendar.com).
  
  

At 11:59 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,212.00 Down $6.60
• Silver, $17.37 Down $0.24
• Platinum, $952.10 Down $10.00
• Palladium, $771.60 Down $4.90

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