There have been steady profits in the precious metal market this week. Gold prices made steady gains throughout the week. The yellow metal gained 3.01% from $1,729/oz to $1,782/oz hitting highs of $1,790 and lows of $1,724. Silver’s price trend this week followed Gold’s very closely. The white metal counterpart started the week on a low of $24.77 and experienced highs of $26.36. Over the week, Silver made consistent gains to $25.86 representing a 4.40% increase. Platinum too made gains this week of 1.19%. The auto industry metal started the week at $1,174/oz and is currently priced at $1,188/oz. Similarly, Palladium made a gain of 2.59% this week. The metal is currently priced at $2,805/oz up from $2,734/oz 7 days ago. Rhodium neared its all-time high this week hitting a high of $29,500 and is currently priced at $29,200/oz up from $28,200 2 days ago.
Gold profited from steady gains this week largely thanks to a weakening US dollar and lower rates of US treasury yields. Precious metal highs this week were experienced when the US dollar index (DXY) was at its monthly lowest of 91.07 and prices for metals decreased when the USD recovered slightly to 91.20. Despite strong economic data for Q1 released recently, the US dollar has failed to make large strides and has been on a downward trend since the end of March. This is a good sign for bullish investors in the precious metals market. The gold price is currently stuck in a range where if it breaks through $1,790.4 it will likely resume its uptrend movement and inversely, move towards a downtrend if prices drop below the $1,723.2 price tag. The yellow bullion will have to manage to pass through the strong resistance on the long term 50% level at $1,788.50.
Gold Prices (1 MONTH)
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Silver has been following a very similar price trend to Gold for the last two weeks. This too can be attributed to the weakening US dollar. Furthermore, both metals have been profiting from a “safe haven” period as global markets have increased volatility. This time of volatility in markets is telling of uncertainty around dividends, cash flows etc. Bullish sentiment is strong for Silver during this month as Silver prices remain above daily 5, 8, 13 and 21 EMA.
Lastly, the rapid rise in global COVID-19 cases has put a dent in optimistic economic recovery hopes. India, a huge market for gold, is currently facing the quickest infection rates in the world. Cases in Europe too have made a resurgence putting doubt on rapid economic recovery. Furthermore, the slow progress of vaccinations in Europe and Asia is pushing the recovery further and further away. Until a clear recovery is visible, the markets will remain volatile which will put the favour towards the bullish investors of precious metals. Despite US yields dropping, the American market has released optimistic economic data, is ahead of schedule for vaccinations and cases have been dropping which may slow the growth in the precious metals market.