Gold

Gold prices remain near highs at the start of the new weeks as market attention remains fixed on the growing fears of a second wave of COVID-19. Over the weekend, headlines and reports pertaining to rising infection rates in the US have created a weak risk environment on Monday, keeping gold bid just below 2020 highs for now.

With infection numbers surging in parts of the US, lockdown measures have been reintroduced, or extended, in response to the situation. Texas has seen its positivity rate soaring to its highest level since the pandemic started at 14.3%. Meanwhile new cases in Florida and California have begun to surpass their rolling 7 day moving average leading to the California governor ordering the reclosure of bars and restaurants in seven counties, including LA.

However, despite the broadly risk off tone, there are some factors mitigating the downside impact of these concerns. Reports that China has approved a vaccine for military use has fuelled some optimism. However, the medicine is not pegged for civilian use and the shift from Chinese military use to worldwide civilian usage would not be a simple one, meaning that the upside impact of this news has largely been diluted.

With infection rates rising in certain parts of the world post lockdown, and with lockdown measures continuing to ease (the UK is due to ease further on July 4th) the risks of a further spread of the virus are growing, meaning that gold prices are likely to retain a safe haven bid.

Silver

The silver market has seen heavily subdued price action over recent weeks as the market awaits fresh directional drivers. Recent upside in equities markets, fuelled by the heavy increasing in monetary easing from central banks, has hit wall amidst the rising fears of a second wave of the COVID-19 virus. Despite upside pressure from the rise in gold prices, the weakness in equities has curtailed bullish momentum for now, creating a more neutral picture.

Technical Views

GOLD (Bullish above 1747.15)

From a technical viewpoint. The picture in gold remains firmly bullish here. With price having broken above the 1747.15 highs, which subsequently held as support, and with VWAP positive, the near-term view remains bullish. Price are currently being held up by the monthly R1 though above here, the 1790.76 level is the main objective for bulls.

Precious Metals Monday 29-06-2020

SILVER (Bullish above 17.2539)

From a technical viewpoint. Silver prices have been ranging just above the yearly pivot at 17.2539, which continues to hold as support. While price remains above here, the near-term view remains in favour of a further push higher into the completion of the symmetry projection at 18.7870. To the downside, a break below the pivot will turn attention onto the 15.7376 level where VWAP is sitting also.

Precious Metals Monday 29-06-2020

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