{"id":145669,"date":"2019-04-12T11:30:32","date_gmt":"2019-04-12T15:30:32","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=145669"},"modified":"2019-04-12T10:58:07","modified_gmt":"2019-04-12T14:58:07","slug":"gold-silver-hit-by-fed-rate-hike-talk","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/04\/gold-silver-hit-by-fed-rate-hike-talk\/","title":{"rendered":"Gold & Silver Hit By Fed Rate Hike Talk"},"content":{"rendered":"
April 12, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Gold<\/strong><\/h2>\n

Despite initial strength earlier in the week,\u00a0gold prices traded lower into the latter half of the week.\u00a0<\/strong>Prices only just managed\u00a0to remain in positive territory. They were knocked down in response to the release of\u00a0the March FOMC\u00a0<\/strong>meeting minutes.<\/p>\n

The Fed kept rates on hold, acknowledging the recent downturn in US data. However, the minutes turned out to show that some members still feel\u00a0further rate hikes<\/a>\u00a0this year could be warranted.\u00a0<\/strong>This would only happen, though,\u00a0if growth gets back on track as projected.<\/p>\n

In light of the Fed pausing its tightening path recently, along with data weakness, many had been expecting the minutes to show discussions around potential rate cuts. This, of course, turned out not to be the case.<\/p>\n

Resurgent strength in equities prices<\/strong>\u00a0also weighed upon gold this week.<\/strong>\u00a0These\u00a0traded higher again following some give-back earlier in the week. The SPX500 traded above last week\u2019s high as optimism around\u00a0ongoing US\/China trade talks, as well as news of a further Brexit extension,<\/strong>\u00a0boosted risk appetite\u00a0 This caused safe haven outflows from gold.<\/p>\n

Technical Perspective<\/strong><\/h2>\n

\"XAUUSD\"<\/a><\/p>\n

Gold prices are trading into the narrow edge of the triangle pattern which has framed price action over the last two months. For now, the 1280.58 \u2013 1324.73 range continues to play out, with the potential for a break in either direction.<\/p>

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\"Gold\"<\/a><\/p>\n

The lower timeframe charts show the severity of the sell-off yesterday which has taken price back under the recent 1294.57 breakout base with the level now once again holding as resistance.<\/p>\n

Silver<\/strong><\/h2>\n

Breaking from their recent correlation,\u00a0silver prices have been harder hit than gold<\/strong>\u00a0this week despite\u00a0a weaker US dollar and better risk sentiment. Higher equities prices can often provide a boost for silver given its industrial usage. However, that has not been the case this week.<\/p>\n

The prospect of a return to Fed rate hikes at some point over the remainder of the year has been sufficiently hampering for metals this week. And this has pulled both gold and silver lower. If we start to see an uptick in US data, we could see this theme developing further.<\/p>\n

The\u00a0March\u00a0US CPI<\/a><\/strong>\u00a0print released this week came in stronger than expected with inflation rising month on month at its\u00a0fastest pace in 14 months<\/strong>, adding further pressure to metals. If oil price continue to rise here and inflation can pick up further, we are likely to hear much more about potential US rate hikes.<\/p>\n

Technical Perspective<\/strong><\/h2>\n

\"XAGUSD\"<\/a><\/p>\n

Silver prices once again retested the 14.9161 breakout base this week, which continues to hold as support. While price remains above this level, we could see a further rotation back up to the 15.5359 level, which price as en route to test this week before reversing lower.<\/p>\n

\"Silver\"<\/a><\/p>\n

The lower timeframes show just how low in the range silver is currently, with plenty of room to go to take the focus off further downside. The bearish trend line from mid-Feb is the next key resistance level with the recent 15.3458 level coming in just above. Bulls will need to see price quickly back above this level to remove the near term risk of further bearishness.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Gold Despite initial strength earlier in the week,\u00a0gold prices traded lower into the latter half of the week.\u00a0Prices only just managed\u00a0to remain in positive territory. They were knocked down in response to the release of\u00a0the March FOMC\u00a0meeting minutes. The Fed kept rates on hold, acknowledging the recent downturn in US data. However, the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-145669","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=145669"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145669\/revisions"}],"predecessor-version":[{"id":145676,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145669\/revisions\/145676"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=145669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=145669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=145669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}