{"id":150062,"date":"2019-06-21T09:30:40","date_gmt":"2019-06-21T13:30:40","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=150062"},"modified":"2019-06-21T08:36:27","modified_gmt":"2019-06-21T12:36:27","slug":"precious-metals-break-to-fresh-highs","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/06\/precious-metals-break-to-fresh-highs\/","title":{"rendered":"Precious Metals Break To Fresh Highs"},"content":{"rendered":"
June 21, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Gold Bulls React to Policy Guidance and Geopolitical risks<\/strong><\/h2>\n

Gold climbed above $1,400\/oz today, perhaps for a false weekly break.<\/strong>\u00a0It set up for the fourth weekly winning streak on the back of a dovish Fed and increasing geopolitical risks. The yellow metal opened the week near $1340\/oz on Monday, June 17. This makes it nearly impossible for it to turn bearish in the few hours left.<\/p>\n

The precious metal had marked a\u00a05-year high<\/strong>\u00a0on Thursday, just cents shy of the psychological level. This came after Wednesday\u2019s FOMC meeting.<\/p>\n

Policymakers are now leaning significantly dovish<\/strong>\u00a0as US economic growth continues to slow according to economic indicators. This helped the yellow metal soar to fresh weekly highs above $1400\/oz.<\/p>\n

The markets have\u00a0continued to react aggressively<\/strong>\u00a0since the Fed. This is thanks to tensions in the Iranian territory increasing. Iran\u2019s military reportedly shot down a US military drone. As if that wasn\u2019t enough, media sources reported that Iran also struck a missile on a Saudi Arabian water plant.<\/p>\n

Fed Priced in For Two Rate Cuts Now<\/strong><\/h2>\n

History indicates that a 0.25 basis points cut may not be enough to stabilize the US economy after this aggressive hiking cycle.\u00a0Participants have factored a 100% cut in July\u2019s meeting.\u00a0<\/strong>However, we can\u00a0expect the Fed to either go with a 50-point cut in the next meeting, or 25 in the next meeting and another 25 on September 18.<\/p>

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Traders and investors now worry both about the Fed\u2019s language and also about the latest piece of data in the US.\u00a0The dollar was sold off massively over the past few sessions as an array of weak data increased economic uncertainties.<\/strong><\/p>\n

Philly Manufacturing Disappoints at the Wrong Time<\/strong><\/h2>\n

The gold call was a relatively easy one to make. Especially when factoring in the list of uncertainties including a dovish Fed, Iran-US\u00a0escalation, the\u00a0US-Sino trade war<\/a>\u00a0and now, US economic indicators.<\/p>\n

Philadelphia\u2019s Fed manufacturing index fell to near zero<\/strong>\u00a0on Thursday. Economists had expected a figure of 12.6 but the activity index fell short to only a figure of 0.3. The\u00a0sentiment report supported expectations of a rate cut<\/strong>\u00a0as the decline reflected muted optimism for the rest of 2019.<\/p>\n

Safe Haven Status Restored As US-Iran Conflict Escalates<\/strong><\/h2>\n

On Thursday, the Islamic Revolution Guards Corps (IRGC) reportedly shot down a US military drone near a vital oil shipping lane.<\/p>\n

US officials had blamed Iran for the two oil tank attacks<\/strong>\u00a0on the Gulf of Oman earlier in the week. However, the IRGC said that the drone was attacked and taken down after violating Iran\u2019s airspace near the Strait of Hormuz.<\/p>\n

Following the drone shootdown,\u00a0Trump said that the US \u201cwill not stand for it\u201d and posted on his twitter that \u201cIran made a very big mistake\u201d.<\/strong>\u00a0The interference allowed gold to jump higher as\u00a0concerns over military confrontation<\/a>\u00a0rose.<\/strong><\/p>\n

Gold Breaks Multiyear Bearish Pattern<\/strong><\/h2>\n

The rally above $1400\/oz could just be short-lived.\u00a0However, it is likely to be revisited shortly<\/strong>\u00a0given the break of an impressive bearish pattern.<\/p>\n

\"gold\"<\/a>Despite a number of previous infections occurring over the past 5 years, without a significant upside, this\u00a0bullish run isn\u2019t falling flat<\/strong>\u00a0after breaking outside a\u00a0cap and handle pattern<\/strong>\u00a0as well as a long-standing triangle.<\/p>\n

Silver Also Up, Remains Within Corrective Pattern<\/strong><\/h2>\n

Silver rose to a fresh 2019 high above $15\/oz<\/strong>\u00a0for the week ending June 21st. However, it has remained within the triangle pattern, keeping the\u00a0upside limited<\/strong>\u00a0to $15.60\/oz for now.<\/p>\n

With a\u00a0double bottom<\/strong>\u00a0near $14\/oz and two optimistic weeks over the period of the last month,\u00a0 the\u00a0chances of a breakout are increasing.<\/strong>\u00a0Adding to that, the May 27 correction down to 78.6% Fibonacci makes this\u00a0bullish scenario more aggressive.<\/strong><\/p>\n

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

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

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

By Orbex Gold Bulls React to Policy Guidance and Geopolitical risks Gold climbed above $1,400\/oz today, perhaps for a false weekly break.\u00a0It set up for the fourth weekly winning streak on the back of a dovish Fed and increasing geopolitical risks. The yellow metal opened the week near $1340\/oz on Monday, June 17. This makes […]<\/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-150062","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150062","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=150062"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150062\/revisions"}],"predecessor-version":[{"id":150064,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150062\/revisions\/150064"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=150062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=150062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=150062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}