Gold rebounded from a new low for the week after Fed Chair Powell echoed Vice Chair Clarida’s comment from yesterday that rates are close to neutral. The yellow metal is garnering some support from a retreat in the dollar from in front of its previous highs.

A December rate hike remains on the table, but with both Clarida and Powell apparently believing rates are near neutral, expectations of rate hikes in 2019 will be further tempered. That will likely apply some pressure to the dollar in the short-term, providing a bit of lift for the precious metals.

However, the stock market has been heartened by the news as well, which may detract from haven interest in gold. Focus now shifts back to the trade war and this weekend’s highly anticipated G20 Summit.

Gold has bounced nicely off the 100-day moving average (1211.60 today) to regain the 20-day MA (1220.76 today) and pressure the recent highs at 1228.10/1230.09. Penetration of the latter would put the cycle high at 1243.44 (26-Oct) back in play.

An eventual breach of 1243.44 would return a measure of credence to the bullish scenario that calls for additional gains toward the 200-day moving average at 1259.61 and the 50% retracement level of this year’s decline, which comes in at 1262.76. An outside day is already apparent and a higher close would offer further encouragement to the bulls.

Silver is up more than 1% on the day after completing just over a 61.8% retrace of the latest leg-up. This left the potential double bottom at 13.95/13.90 well protected and preserves hope for the silver bulls. In addition, the gold/silver ratio has backed-off from above 86 once again.

This market has been a dog lately; consistently disappointing on every rally. Silver is unloved to be sure, which is frequently exactly the time you want to be a buyer. Hope springs eternal . . .

Platinum fell to a new 9-week low amid talk of GM plants closing and auto tariffs. Chart support at 824.50 (04-Nov low) was negated, but the move below the 100-day moving average (822.22) has proven unsustainable thus far. Platinum is nearly 2% off the intraday low of 812.00. However, a rebound above the 9-day MA at 841.00 is needed to ease short-term pressure on the downside.

Palladium on the other hand continues to ignore demand side concerns, surging to a new record high at 1186.25. While the divergences mentioned yesterday remain a concern, pullback within the well established uptrend will continue to be viewed as corrective as long as supply worries persist.


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