Gold, Silver, Platinum Forecasts – XAG Hits Record High with XAU, Platinum Riding Its Coattail

Gold (XAU/USD)

Gold soared to a record high on Thursday, driven by expectations of U.S. interest rate cuts and strong safe-haven demand, amid central bank buying. Fed Chair Powell’s remarks boosted prospects of nearing the Fed’s 2% inflation target, escalating chances of a June rate cut to 72%, as per CME’s Fedwatch Tool. Lower interest rates typically weaken the dollar, enhancing gold’s attractiveness by reducing the opportunity cost of holding this non-yielding asset and making it more affordable for international buyers. Central bank purchases remain robust. Geopolitical risks and the upcoming U.S. non-farm payrolls report may further influence gold’s  uptrend. High prices could impact Indian wedding season consumption, but demand in China is expected to stay strong.

Technically, XAU/USD is in an uptrend with no resistance in sight. This means that pattern rather than price will lead to the end of the rally. The best pattern for signalling a top will be a closing price reversal. The best support is the 50-day moving average at $2040.10.

The rally is not going to last forever so traders should prepare an exit strategy ahead of time. The news keeps reporting central bank buying. They bought when the market was trading flat between December and early March. Who do you think is selling it to the CTAs and small speculators? This is not going to end pretty.

Silver (XAG/USD)

Silver (XAG/USD) is trading higher on Thursday in a pure technical move that is merely piggy-backing the rally in gold. Silver is the poor man’s gold. If you want to chase it, chase it. Near-term resistance is $24.50. The big-top target is $25.91.

What do you think is pushing silver higher? Safe-haven demand, anticipation of rate cuts?  Central bank buying? If we were truly in a “safe-haven demand” environment, Treasury Bonds, Japanese Yen and the Dollar would be sharply higher and paper assets like stocks would be lower. So are we to believe that gold and silver traders are the smartest traders in the world with the ability to predict an event that warrants safe-haven protection? Last year, we were being told that Cryptocurrencies replaced gold as the safe-haven. Did something change?

Platinum

Platinum is also piggy-backing the surge in gold. Just last week, traders were worried about a bear market developing due to labor problems and now we’re testing the 200-day moving average at $922.80 after crossing to the bullish side of the 50-day moving average at $908.50.

Looking at the daily chart, the market has plenty of room to the upside to rally with the next major target the December 28 main top at $1013.53. If you throw out the fundamentals, in a pure technical play, we could get there if enough buyers come in to drive prices higher.