Gold faces down a resurgent dollar overnight to remain unchanged but silver suffers as it breaks a key technical indicator.
Gold
Gold traded quietly yet again overnight in a seven dollar range but closed in a flat line with the previous days close at 1294.00. Overall, gold continues to consolidate its slow, medium-term gains near to the top of its two-month range.
One positive is that it has shrugged off a stronger U.S. dollar overnight as the U.S. Senate made progress on the tax reform bill. Conversely, gold has not rallied at all after North Korea’s latest missile test of what appears to be a genuinely Intercontinental class of ballistic missile. It further reinforces that the risk-off safe-haven premiums associated with gold are gone for now. This leaves it entirely at the mercy of U.S. yields and the dollar index.
Gold is unsurprisingly unchanged this morning with resistance at the 1299.00/1300.00 zone followed by 1306.50. Support is at the overnight low at 1290.00, followed by the 100-day moving average and Friday’s low at 1285.00.
The pace of data releases picks up into the 2nd half of the week which will hopefully shake gold from its lethargy.
Silver
Silver did not fare as well overnight as stop losses were triggered sending it lower by 20 cents to close at 17.8500. Having been wedged for the past week between the 100 and 200-day moving averages (DMA), and flirting with its five-month trendline support, this gave way as silver broke the 100-DMA at 16.9900 sending traders scurrying from long positions.
Like gold, silver has comatose in Asian trading, hovering in a barely discernable 16.8700/16.9100 trading range. With Europe’s arrival, things may get more interesting with the next support at the overnight lower of 16.7700 followed by the somewhat distant 16.5400.
Resistance is now the 100-DMA, today at 17.0000, the trendline at 17.0700 and then the 200-DMA at 17.1270.
All in all, silver’s price action looks more vulnerable to further dollar strength than gold’s with reasonably significant layers of resistance much closer to current levels then support.