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Gold, Silver, Platinum Forecasts – XAU/USD Skyrocketing Toward Record High
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Key Points:
- Gold (XAU/USD) continues its rally, nearing a three-month high due to Fed cut expectations.
- Silver (XAG/USD) surges, shadowing gold's rise, with key resistance at $24.50 and $25.90.
- Platinum prices rise on short-covering amid a severe industry crisis in South Africa.
Gold
(XAU/USD) is extending its rally into a second consecutive session on Tuesday. Prices reached a three-month high on Monday, fueled by growing expectations of a June interest rate cut by the U.S. Federal Reserve.
Last week saw gold climb approximately $50, a move spurred by lackluster U.S. manufacturing and construction spending data, coupled with easing price pressures. Market sentiment, as indicated by the CME Fed Watch Tool, suggests a 71% likelihood of a Fed rate reduction in June. Should inflation figures stay subdued, the upward trajectory of gold prices is likely to persist.
Technically, the strong upside momentum suggests that traders are targeting the December 2023 top at $2149.00 and beyond. Key support is the 50-day moving average at 2035.45.
Silver
XAG/USD is piggy-backing the rise in gold prices on Monday. Today’s price surge is partly attributable to a sustained breakout above the 200-day moving average at $23.27. This long-term trend indicator had suppressed silver prices since January 3. Unlike XAU/USD which is in striking distance of an all-time high, silver faces resistance at $24.50 and $25.90.
Platinum
Platinum prices are currently on the rise, primarily due to short-covering, which has been influenced by the increasing prices of gold and silver. However, despite this uptick, platinum, an industrial metal, seems to be edging closer to a significant decline rather than experiencing a substantial upward breakout.
Technically, while gold and silver are soaring through their 50- and 200- day moving averages, platinum is struggling with its intermediate and long-term moving averages at $914.07 and $924.36, respectively.
In recent developments, Paul Dunne, CEO of Northam Platinum (NPHJ.J), a leading South African platinum mining company, expressed his concerns on Friday. He highlighted that platinum mining firms in South Africa, the foremost global supplier of the metal, are grappling with extremely challenging market conditions. According to Dunne, the sector is undergoing the most severe crisis it has faced in thirty years, with plummeting prices exerting intense pressure.
Dunne remarked, “I personally believe it’s the worst crisis I have seen in three decades, on a relative basis,” emphasizing the critical situation facing the industry. He added, “The squeeze on the industry is severe,” during a discussion with journalists.
This crisis has led to significant operational changes within the industry. South Africa’s major platinum producers are now curtailing investments worth billions of rand earmarked for expanding output. Additionally, they are implementing job cuts as part of their strategies to manage costs and mitigate the impact of declining profitability caused by falling metal prices.
About the Author
James Hyerczykauthor
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
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