Gold prices inched lower on Tuesday while silver traded higher as precious metals prices continued to consolidate after falling dramatically so far this year.
What analysts are saying
Gold pulled back as the US dollar has retaken some of the ground it lost last week. The ICE US Dollar Index DXY,
was up 0.6% at 107.10 in recent trade.
According to Jeffrey Halley, a senior market analyst at OANDA, the technical setup underpinning the gold market doesn’t look very encouraging.
“Gold needs to overcome heavy resistance at the $1,745.00 an ounce triple top before the gold bugs can really start to get excited. It has support at $1,680.00, and then the longer-term support around $1,675.00 an ounce zone,” Halley wrote in a note sent to MarketWatch Tuesday morning.
For now, the precious metal is likely to “remain on standby until the Federal Reserve interest rate decision Wednesday, said Lukman Otunuga, manager, market analysis at FXTM, in a market update, adding that gold has barely moved since Monday “due to the absence of a fresh directional catalyst.”
It will be interesting to “see how gold reacts when the Fed moves ahead with a 75-basis rate hike,” he said. “Will the precious metal weaken due to its zero-yielding status? Or will a weaker dollar limit downside losses?”
The $1,700 level “remains a key point of interest this week and a level that can determine whether gold rebounds or extends the decline,” said Otunuga.
Credit: www.marketwatch.com /