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Gold price holds steady, oil bounces, but platinum remains under pressure

Gold has been little-affected by the volatility in stocks, while oil prices have regained some ground. Platinum, meanwhile, remains under pressure.

​Gold calm despite renewed risk-off moves

The sudden drop in stocks yesterday does not appear to have provided much of a lift for gold, which has remained around yesterday’s levels without much of a bounce. Indeed, attempts at a bounce appear to have stalled entirely, with little appetite to even test the highs seen at the beginning of the week.

Of course, the stronger dollar plays a big part here, as high inflation readings drive investors to the greenback in the expectation that the tightening of monetary policy in the US will be an extended process.

As a result gold is out of favour, ignored in the rush to move into higher-yielding bonds at the very moment when it might have been expected to shine.

Admittedly the bearish case hasn’t got much traction here either, with little inclination evident at present to move lower towards $1800 and then $1780.

Meanwhile, a sustained bounce requires the price to move back above $1836, Tuesday’s high, and then move on above the 200-day simple moving average (SMA) which is currently $1837.

Brent crude hovers above 50-day MA

Two days of losses have stalled here, as buyers attempt to move back into oil. The battle of the supply and demand outlooks continues, with the latter and its expected weakening of global demand holding sway over the previous two days.

Expectations of weaker growth across the glove, and even a recession, have meant that the bull case for oil has taken a knock, even with expectations of a European ban on Russian imports providing support to the price.

Price action this week has seen Brent unable to push on through the area of resistance around $114. The price needs to clear this to open the way to $120.50, the high from late March, and then above this the February peak at $131 comes into view.

Sellers will look to push the price back to $101.50 and then the $99.20 support zone, which has held since early April.

Platinum prices slump once again

Expectations of strong supplies of platinum continue to drive the price lower, reinforced by the more negative economic outlook.

As with other risk assets, platinum has been under pressure as forecasts of economic growth are revised down, while the dollar’s strength provides another driving factor for losses.

The slump over the past week has seen the price falter at the 50-day SMA, and it is now on the cusp of returning to the support zone around $915. Additional declines below this level would bring the lows of late 2020 into view around $840.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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