Gold is facing a free fall towards lower levels following the dip below the $1,700 price on Tuesday this week. The yellow bullion experienced a 2.37% loss in the last week and is currently sitting at $1,687/oz after hitting a low of $1,679/oz. Presently, Gold is down 11.22% since the start of 2021. Similarly, Silver also retreated on Tuesday night resulting in a dip below the $24 level. It has since recovered from that fall with a present price of $24.19/oz. The white metal demonstrated a 4.08% loss from $25.22/oz last week. Platinum has had an up and down week experiencing lows of $1,149 and highs of $1,194 but ultimately ended at the same level it started at: $1,176/oz. Palladium is down 0.22% this week to $2,637 following its highs of the weeks before. Rhodium, the decade’s hottest metal, has been down all week after it hit an all-time high of $29,800/oz on March 22nd. Since then, the price of the NO2 reducing metal has dropped to $26,000/oz demonstrating a hefty 8.45% loss in the last 7 days.
US Treasury yields continue to rise and optimism too as Joe Biden is set to announce another fiscal stimulus today, this one transportation focused. The US economy is strengthening its recovery as well as the US dollar strength which ends on quarter highs pushing precious metals investors away from Gold. Analysts believe that if Gold were to fall below the $1,650 psychological level, the yellow metal may experience a free fall to lower prices. Despite this, the drop below the $1,700 will likely cause an immediate uptrend towards prices around $1,785 before potentially dropping again.
GOLD Prices (4 months)
Source: Tradingview: Gold Futures: Comex
The trend for Platinum currently is bullish amidst the knock-on effects of the COVID-19 pandemic. Reports have shown that despite demand for Platinum dropping 7% during the pandemic, the supply faced a greater shock with a 20% decline in global supply. Platinum is likely to see a continued rise in the coming months ahead as industrial and automotive industries, which make up 57% of Platinum consumption, steady themselves and start pre-pandemic levels of demand for Platinum.
Silver prices remain low due to high US dollar strength which is being supported by people increasing the yields on US Treasury bonds. People are starting to see a pre-pandemic routine return to life and are optimistic about economic recovery. Despite this, people still see risks of inflation rising following the $1.9 trillion American fiscal stimulus. At the moment, investors are holding off buying Silver and Gold because the US dollar strength is making it too expensive to do so.
European lockdowns and increased daily cases have also hit quite a toll on the price of Gold. There are still sentiments of pessimism in Europe as they continue lockdown woes while their American counterparts vaccinate and reopen at phenomenally fast rates.