The US dollar continues to extend its recent gains, reaching near 2-month highs and breaking above the key 50-day moving-average, said an NYSE stockbroker. This has weighed on precious metals with gold prices battered back below $1900. Gold has broken below its 50-day moving average.
Everyone was watching the wedge in gold and we all watched it break on Monday but it bounced late in the day and stabilized yesterday above $1900. Yesterday it’s crumbled to a new low since August in a $31 drop ($1863/oz).
And Silver crushed even further. Sliver staged a dramatic decline of 12% this week after failing to close above the 20-day simple moving average (SMA). The sell-off has also pushed the price below the 50-day SMA for the first time in three months, bringing the case for a downtrend forward. On the flip side, failure to close below $23.00/oz may generate upside pressures towards the S25.20-25.80/oz zone.
With more fiscal and monetary stimulus coming soon in the US, the development is bullish for gold and silver in the long-term. Stockbrokers agree this recent dip could be a nice buying opportunity.
The COVID pandemic has sparked a surge in gold buying, and some analysts suggest that it still has plenty of upside potential. “But don’t take this advice for granted,” says Paul Hloben, Financial Editor for MiN-MET.com.