Gold Futures Daily Chart
Gold futures fell for an 8th consecutive day in early trading on Tuesday, edging towards the prior major low of $1,168 per ounce that was reached in August. Analysts are looking to the robust U.S. dollar and upcoming economic data as cues for the direction of the yellow metal. U.S. retail sales, inflation and manufacturing data are among the releases due later this week. Gold prices now have fallen about 12% since the recent high of $,1369 in April and have lost 8% for the year.
U.S. Dollar Index Daily Chart
Meanwhile, the U.S. dollar index, which measures the greenback against a basket of six major currencies, has soared to the highest levels since June of 2017. The dollar was boosted after last week’s Federal Reserve decision to remain on a hawkish path, as the U.S. central bank indicated plans to raise rates in December and stay on track for two more potential hikes by mid-2019. The strong dollar makes it more expensive for holders of other currencies to buy gold, dampening its appeal.
Concerns over a weakening global economy and political uncertainty in Europe have spurred risk-off sentiment and safe haven buying of the U.S. dollar rather than gold.
Silver Futures Weekly Chart
Finally, on Tuesday silver futures fell to the lowest levels since January 2016, looking very weak from a technical perspective with the prior low of $13.63 from December 2015 standing out as potential support. Silver futures traded at almost $50 an ounce in April of 2011.