Gold
It’s been another impressive week for the yellow metal which has broken out to new all-time highs.
The continued sell-off in the US dollar is helping to keep gold prices well supported. So too are the ongoing concerns over the growing risks of a second wave of the COVID-19 virus.
Last week, the Fed highly emphasized the great deal of uncertainty within its outlook for the economy. The US central bank sought to reassure markets that it stands ready and willing to act further if necessary.
In addition, in light of the increasing number of states returning lockdown there, the market widely expected further easing this year. With US rate expectations anchored firmly to the downside, gold has plenty of room to appreciate further given the extremely subdued inflation environment.
The COVID-19 landscape is darkened further this week. More countries are reporting an increase in the death toll as well as fresh actions to combat the spread of the virus.
So far, it looks unlikely that we will see a return to nationwide lockdowns. This should help spare the most severe impact on the economy.
However, with authorities and officials keeping a close eye on the situation, this could easily change. Any sign that such conditions might re-emerge would certainly present firm upward pressure for gold.
Fresh Highs for Gold
This week, gold prices have broken out above the top of the rising wedge formation and also above the prior highs at 1980.66.
While above this level, focus is on the continued upside with any retest of those prior highs likely to find support. Should price see any correction below that level the next support to watch will be the 1980.66 level.
Silver
Silver prices have continued higher this week also with prices supported by an optimal combination of higher gold prices, higher equities prices and a weaker US dollar.
With the majority of companies reporting earnings in the US beating expectations, the equities outlook has turned more favorable. This, in turn, is helping drive silver prices higher.
Silver Breaks Long Term Resistance Level
Silver prices have now broken above the major long-term level of 27.4502 which marked the swing lows in 2011 and 2012. While price remains above there, focus is on a continuation higher towards the next key resistance level of 30.1111.
Should price seen any retracement below this level, the next area to focus on will be the 25.1018 level support.
