Gold Dips as Strong Dollar and Rising Yields Weigh on Prices
Gold prices are retreating as the U.S. dollar reaches new highs, driven by rising Treasury yields and a strong dollar. The ISM Services PMI report, while missing estimates, showed resilience in the services sector, bolstering the dollar's strength. This is bearish for gold, as the commodity is dollar-denominated. Treasury yields are climbing, with the 2-year yield surpassing 4.85%, the 10-year near 5.35%, and the 30-year testing multi-decade highs above 5.70%. The FedWatch Tool suggests a 23.8% chance of a rate hike in October, but long-term concerns about U.S. finances are not yet supporting gold.
Gold is testing support at $4,160, $4,180 and could drop to $4,000, $4,020 if it breaks below this level. The Relative Strength Index (RSI) indicates room for further declines. Meanwhile, silver is gaining ground as the gold/silver ratio pulls back below 68.00. If this ratio settles below 67.55, it could push silver higher. Silver remains near support at $61.00, $62.00, with potential downside to $56.00, $57.00 if it breaks below $61.00.
Platinum is attempting to rebound above the $1,700 level, supported by a pullback in oil prices and ignoring stronger dollar and rising yields. If platinum moves above $1,720, it could test resistance at $1,780, $1,800. On the downside, a drop below $1,670 could push it toward $1,600, $1,620, with further support at $1,520.