Last week, metals continued to rise further, Gold managed to post a new high of the year, while Silver underperformed Gold and remained far from this year’s high.
However, notable rally in Gold did not last. Gold took a nosedive over the past few sessions, losing around $30 in few days, declining all the way back from this year’s high to $1260 earlier this morning.
As for Silver, it also failed to sustain its recent gains, declining from $17.40’s all the way back to $16.85, posting five days of consecutive declines so far.
There are many factors to keep in mind for such unstable trend whether in Gold or Silver, fundamentally and technically at the same time.
You Have Been Warned Before
In our previous report, we made it very clear for Gold buyers when it was trading at the high of the year, saying “This is NOT the right time to buy gold”.
Back then, technical charts were heavily overbought on most timeframes, while fundamentals were supporting further gains. However, buying gold and metals in general at the high of the year is not the perfect idea, especially with the current political risk across the globe.
Gold Failed To Touch $1300
Gold has been trending higher, and again flirting with $1300. The big question remains for many traders is whether to build new positions for the rest of the year or is this just another teaser trap before the downside pressure resumes?
There is no short answer to such question for the time being. There are many factors involved, which we should keep an eye over the coming days.
From a fundamental point of view, the political and geopolitical tension across the board keeps the bullish outlook in place. However, the risk for the Gold rally would hit when such tension suddenly eases with no reason.
On the other hand, the world is waiting for the Federal Reserve decision later this week, which set to have the biggest impact on Gold and Silver, depending on the Federal Reserve statement, including the Fed’s decision, economic projection, the discussion about unwinding its balance sheet and finally the possibility for further rate hikes later this year.
Those are the fundamental factors that traders should keep an eye on over the coming days/weeks.
Read more: https://www.orbex.com/blog/2017/06/precious-metals-nosedive-gold-failed-touch-1300/