Gold is facing a significant weakening of the bullish momentum. Actually, the yellow metal is stuck. Meanwhile, silver seems to have enough room for another run in the near future.
Once again, the FED shows no signs of trying to shift its current monetary policy, which has been higher for longer than expected. Experts believe the situation will eventually drive gold off the current position in one way or another. One thing is certain, the asset will fail to stay in the same trading channel.
As the Federal Reserve delays the beginning of the easing cycle while laying the foundation for a potential rate reduction, analysts see gold trapped in a narrow trading range. The markets now predict a rate cut by the Fed in May.
The gold market fails to overcome resistance above $2,050 per ounce, but it is still holding support far above $2,000 per ounce. With a weekly decrease of 0.75%, April gold futures are currently traded at $2,038.90 per ounce.
As stated earlier, experts predict several scenarios. Some believe it will pull back while others are sure the price will recover and get back to $2,050 per ounce pushed by weaker inflation data. At the same time, all analysts agree market participants should not expect a significant breakout pretty soon.
It would be wrong to expect dramatic shifts right now. What’s more, there are more signs of the gold price downside. In simpler words, the yellow metal is like an alligator waiting for his prey always ready to hunt it down.
Meanwhile, the silver market is facing practically the lowest volatility over the last year. So, we may expect some bullish momentum pretty soon. It means, the asset still has enough room for the new rally. While the price remains below $23, long positions at this particular rate look quite promising.
May the trading luck be with you!