Safe-Haven Metals Market Watch: Gold & Silver
The recent interest rate decisions by the Federal Reserve, European Central Bank, and Bank of England have fueled demand for safe-haven assets like gold and silver. Despite higher rates typically being unfavorable for non-yield securities, the precious metals experienced a boost in value, only to retreat back to prior levels.
Gold Prices Reach Nine-Month High
Gold futures reached a nine-month high, with the Federal Reserve’s 0.25% interest rate hike playing a key role. The European Central Bank and Bank of England also made aggressive moves, increasing rates by 0.50%. This renewed optimism for safe-haven assets led to a rise in gold prices.
Technical Analysis of Gold (XAU/USD)
Gold futures experienced a recent high of $2089.2 in August 2020, but a rejection of the March 2022 high of $2078.8 caused a drop below the psychological resistance of $2000. As interest rates continue to rise, gold has regained its status as a favored industrial and safe-haven metal. Currently, prices are supported at $1930 and resistance at $1944. A break above this zone could lead to a retest of $1975 and a rise back to $2000.
Technical Analysis of Silver (XAG/USD)
Silver futures are currently facing resistance from the 61.8% Fibonacci retracement of the 2008 to 2011 move at $24.220, and a descending trendline from the March 2022 move restricts upside movement at $24.500. However, a break of the current daily high at $24.750 could drive further gains. Support remains at $23.740 with the 50-day MA resting at $23.35.