Silver and Gold Prices React to Geopolitical Tensions

Silver prices surged near $29.80, while gold corrected from record highs above $2,350, driven by geopolitical tensions and market uncertainty, with potential for further upside if conflicts escalate but hindered by US Dollar strength and hawkish Fed policy expectations.

At a glance

  • Silver prices surged to near $29.80, the highest since February 2021
  • RSI indicates overbought conditions, potential for consolidation
  • Support levels near $27.80-$27.75, possible decline to $26.00
  • Gold prices corrected from record highs, trading above $2,350
  • Geopolitical tensions driving market uncertainty and investor interest in gold

The details

Silver and Gold Prices React to Geopolitical Tensions

Silver prices surged on the first day of the week, maintaining a strong position near the $29.80 region, the highest level since February 2021. The white metal continued to hold onto its intraday gains during the early European session, currently hovering just below the mid-$28.00s.

The recent breakout above the $25.60-$25.70 horizontal resistance has triggered bullish sentiments among traders.

However, the Relative Strength Index (RSI) is indicating overbought conditions on the daily chart, suggesting a potential need for consolidation or a modest pullback before further appreciation.

In case of a corrective decline below $28.00, support levels are expected near the $27.80-$27.75 region, with a possible fall towards $27.25 if the former is breached.

Further downside momentum could target support near $26.35-$26.30, potentially dropping to the $26.00 mark and the $25.70-$25.60 resistance breakpoint.

On the upside

a sustained move above $28.50 could pave the way for a retest of the $29.00 mark, with a potential extension towards the year-to-date peak of $29.80. Bullish sentiment will likely drive a push towards the psychological level of $30.00.

Shifting focus to gold prices, the precious metal saw a correction from its recent record highs of $2,432, currently trading above $2,350. The escalation of tensions between Iran and Israel over the weekend spurred investor interest in gold as a safe haven asset.

Concerns over further retaliation following Iran’s drone attack on Israel have fueled market uncertainty.

While the UK, France, and Egypt have condemned Iran’s actions, Saudi Arabia has urged restraint.

The market reaction has been reflected in the S&P 500 futures, which gained 0.30% amidst the ongoing geopolitical tensions.

However, the upside potential for gold prices is being capped by market optimism.

If the conflict in the Middle East intensifies, gold prices could potentially reach $2,400. Nevertheless, increased demand for the US Dollar and hawkish expectations regarding Federal Reserve policy could impede the upward trajectory of gold prices.

Furthermore, the rise in 10-year US Treasury yields to 4.65% and the US Dollar Index to 106.20, following upbeat US Retail Sales data for March, has added further complexities to the precious metals market.

The outlook for both silver and gold prices remains bullish in the long term, supported by technical indicators such as the 20-week Exponential Moving Average for silver and the bullish range of the 14-period Relative Strength Index for gold.

Overall, the interplay between geopolitical tensions, market sentiment, and economic indicators is shaping the trajectory of silver and gold prices, highlighting the importance of monitoring global developments for investors and traders in the precious metals market.

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Facts attribution

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If you suspect false information in the article, you can use this section to investigate where it came from.
– Silver catches fresh bids on the first day of a new week
– Stalls its retracement slide from the vicinity of the $29.80 region
– Highest level since February 2021 touched on Friday
– White metal sticks to intraday gains through the early part of the European session
– Currently placed just below mid-$28.00s
– Recent breakout through the $25.60-$25.70 horizontal resistance seen as a trigger for bullish traders
– Relative Strength Index (RSI) is flashing overbought conditions on the daily chart
– Prudent to wait for near-term consolidation or modest pullback before positioning for further appreciating move
– Corrective decline below $28.00 likely to find support near $27.80-$27.75 region
– Acceleration of fall towards $27.25 area possible below $27.80-$27.75
– Follow-through selling might expose next relevant support near $26.35-$26.30 region
– White metal could drop to $26.00 mark and $25.70-$25.60 resistance breakpoint
– Sustained strength back above $28.50 level could allow XAG/USD to reclaim $29.00 mark
– Momentum could extend further towards $29.80 zone, or the YTD peak
– Bulls likely to aim back towards conquering $30.00 psychological mark
– Silver price corrected from fresh highs of $29.80 to $27.50 before rebounding to $28.50
– Investors expect Middle East tensions to not escalate further
– Iran stated they do not want to raise tensions further in the Middle East
– US President Joe Biden said the US won’t support a counterattack from Israel
– Iran launched drones and missiles on Israel on Saturday
– Higher bond yields due to uncertainty about when the Federal Reserve will pivot to rate cuts are hindering Silver price
– 10-year US Treasury yields rose to 4.65%
– US Dollar Index rose to 106.20 after upbeat US Retail Sales data for March
– Retail Sales rose by 0.7% from expectations of 0.3%
– Silver price recaptured a three-year high near $30.00
– Long-term outlook for Silver price is bullish
– 20-week Exponential Moving Average near $25.00 is sloping higher
– 14-period Relative Strength Index shifted into the bullish range of 60.00-80.00
– Gold price is above $2,350 early Monday after a correction from record highs of $2,432 on Friday
– Gold price rose due to escalation in conflict between Iran and Israel over the weekend
– Investors turned to gold as a safe haven following Iran’s drones attack on Israel
– Markets fear Iran’s strike on Israel could lead to further retaliation
– UK, France, and Egypt condemned Iran’s action, while Saudi Arabia called for restraint
– S&P 500 futures gained 0.30% on the day, reflecting market optimism
– Further upside in Gold price is capped by market optimism
– If Middle East conflict intensifies, Gold price may reach $2,400
– Increased demand for US Dollar and hawkish Fed expectations could hinder Gold price upswing
– US Retail Sales data due later on Monday, with an expected increase of 0.3% in March

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