As geopoliticial worries sent gold futures and options to a two month high this week, speculators taking a bullish stance on silver, RAK BANK tell us their predictions for the coming week
In last week’s review RAK BANK suggested that after its recent sell-off gold could probe the 100 day MA, then set at $1252, but that any such technical weakness was seen as a buying opportunity with $1295 the target. This prediction proved to be ‘on the money’ as the yellow metal dipped to a low of $1251.50 on Tuesday following strong US Job Openings data and generating fresh short selling. However this was quickly followed by an escalation in tensions between North Korea and the US and a sustained rally in the gold price that culminated in a peak of $1291.50 on Friday. The market ended just off the highs at $1288.50 bid, a gain of $30.50 or 2.42% and left gold poised to make its third serious attempt since April this year to penetrate key long term resistance set at $1295. Chart watchers will be aware that such a move would signal a break above a technical downtrend that has been in place since September 2011 when gold posted its all time high of $1920 and would potentially herald a new bull market with $1350 the next point of resistance on the charts. With the US seemingly “Locked and Loaded” according to President Trump, geo-political tensions are running high, and with benign US inflation data easing the upside pressure on interest rates, gold seems to have every chance of finally making that illusive and conclusive break to the upside.
Silver initially extended the previous week’s 2.58% decline to post a low of $16.12 before tracking gold higher on the North Korean crisis to reach $17.23 on Thursday. The industrial precious metal eased back to end at $17.06 on Friday, but this still represented a sector leading gain of 83 cents or 5.11% on the week and importantly for chart watchers the close was above the 200-day MA set at $17.04. If this break higher is confirmed in the week ahead technical traders will have $18 firmly in their sights, although much depends on gold and the unpredictable actions of President Trump.
Platinum followed the previous week’s $30 increase in value with another solid performance as the noble metal rose from a low of $955 posted on Monday to reach a high of $991 on Friday before easing back on profit taking to end up $20 or 2.09% at $979 bid. After spending much of 2017 in the doldrums, platinum seems to have enough upside momentum to push the price back above $1,000 in the near term with this year’s high of $1,044 on technical radar screens, particularly with growing political tensions causing concern about supplies from South Africa, the world’s leading platinum producer.
Palladium followed the rest of the precious metals sector higher to reach $904 on Thursday after posting an early low of $870 on Monday, however the junior precious metal failed to maintain its’ foothold above $900 with the price easing back to $891 bid by the close on Friday, representing a pared gain of $14 or 1.6% on the week. The rising political tensions in South Africa, which produces 45% of the world’s palladium, are also causing concerns about supply, which could intensify the chronic physical squeeze that has driven the market backward this year, and provide the spark to push prices towards $1,000.