The recent fluctuations in the precious metals market have raised significant concerns among investors, particularly regarding gold and silver prices. As the U.S. dollar experiences a rally, gold has demonstrated a notable pullback, reflecting the intricate relationship between currency strength and commodity pricing. The dollar's ascent can be attributed to various economic factors, including robust employment data and anticipated interest rate hikes by the Federal Reserve. This environment fosters an unfavorable backdrop for gold and silver, which traditionally thrive during periods of dollar weakness.
Moreover, external market conditions contribute to the bearish sentiment surrounding these metals. Increased volatility in equity markets often drives investors toward safer assets; however, the current trend indicates a preference for cash or cash equivalents amidst rising inflation concerns. Consequently, this shift diminishes demand for non-yielding assets like gold and silver. Additionally, geopolitical tensions and economic uncertainties further exacerbate price pressures on these commodities as traders recalibrate their risk appetites.
Better trader and investor risk appetite is creeping back into the marketplace at mid-week, which is also a negative for the safe-haven metals. The Middle East tensions remain high but have not escalated, as many expected, after the weekend military exchange . And, Iran has not retaliated since the Israeli assassinations of Iran’s proxy officials. One school of thought is that Iran does not want to directly attack Israel because Iran thinks that would give Israel and its vastly superior air power the green light to take out Iran’s key nuclear installations that most believe are trying to make a nuclear bomb. One Middle East strategist said Israel has been waiting for a good excuse to seriously degrade Iran’s nuclear capabilities.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to steady to slightly lower openings when the New York day session begins. The U.S. stock indexes have made solid rebounds from their August lows. The big event of the week in the stock market is Nvidia’s earnings that are out today.
Silver is under strong pressure as gold/silver ratio climbed above the 85.50 level.
The nearest support level for silver is located in the $28.75 – $29.00 range. A move below the $28.75 level will push silver towards the next support at $27.20 – $27.50.
This sentiment was echoed by TD Securities’ Senior Commodity Strategist Daniel Ghali, who said, “Downside risks are now more potent,” in a note published Monday. “The ship is crowded. In fact, it has scarcely been as crowded as it is today. Do you have a slot secured on the lifeboat?” he added.
Dogs (DOGS) was the only standout performer, gaining 18%, while Immutable (IMX) increased by 2.2%, and Aave (AAVE) gained 1.3%. DePIN project io.net was the biggest loser, falling 15.9%, followed by losses of 15.4% and 14% for ORDI (ORDI) and SATS (1000SATS), respectively.
The overall cryptocurrency market cap now stands at $2.08 trillion, and Bitcoin’s dominance rate is 56%.
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