Gold and silver prices simultaneously increased in today's trading session as the USD weakened, creating conditions for the group of precious metals to recover after a series of sharp declines. However, investors are still cautious about the prospect of the US Federal Reserve (Fed) continuing to maintain tight monetary policy.
The recovery of precious metals takes place in the context of the USD slightly decreasing after many consecutive increasing sessions. However, the USD Index still fluctuates near its 52-week high, while the yield of 10-year US Treasury bonds remains around 4.4%, continuing to limit gold's gaining room.
Data released on Thursday showed that the US Personal Consumption Price Index (PCE) – an inflation measure prioritized by the Fed – increased by 4.1% over the same period last year. Personal income and consumer spending also increased by 0.7% in May.
These data reinforce the view that the Fed is likely not in a hurry to ease monetary policy. The market still believes that the possibility of the Fed cutting interest rates right at the July meeting is quite low, although the fall in oil prices has somewhat eased inflationary pressure.
According to analysts, the diễn biến of the precious metals market is still mainly influenced by the tough message that the Fed issued after the meeting on June 17. In the past time, cash flow in the market has leaned towards the USD and bond yields instead of turning to gold as a safe haven asset.
From a technical perspective, the 4.023–4.045 USD/ounce area is currently considered the nearest resistance level for gold. If successfully surpassing this area, the price may head towards the 4,122 USD/ounce mark and further to 4,170.85 USD/ounce.
Conversely, if selling pressure increases and the price breaks the support zone of 3,959.08 USD/ounce, gold is at risk of falling to 3,886.46 USD/ounce, even falling to the 3,850 USD/ounce mark.
For silver, the important resistance level is in the 58.77–61.55 USD/ounce range. If it passes this area, the price may head towards the 62 USD/ounce mark and further to 72 USD/ounce.
In the opposite direction, if losing the support level of 55.40 USD/ounce, silver prices may continue to fall to 51.64 USD/ounce, before testing the 48.97 USD/ounce zone.
