Gold Flat Ahead of FOMC Minutes, Copper and Platinum Extends Losses

Mauricio Carrillo

Gold and other precious metals are trading depressed on Wednesday as investors are joining improving market sentiment after Trump’s truce on Huawei and a firm dollar.

While gold is trading sideways, Silver is also moving sideways just above 14.00 as the pair is moving in a consolidation pattern. Palladium remains in range but today it is testing the downside of the channel at 1,310.

Copper and Platinum are making the difference today. XCUUSD accelerated its decline as it broke below the 2.700 support to trade at minimums since January at 2.668. XPTUSD resumed its downtrend after a brief rebound from 807.00 on Tuesday. It is now testing fresh lows at 806.00.

Metals focused on FOMC and political factors

As reported yesterday, market sentiment was improved at the beginning of the week as Donald Trump accepted a 90-day truce with Huawei before implementing all the restrictions directed by the White House.

Also, a firm dollar is pushing investors far from metals. DXY is now consolidating levels around 98.00.

Finally, the market is waiting for the FOMC minutes release as an indicator of what the Federal Reserve will do in terms of interest rates. Remember that the interest rate will affect the US Dollar, and consequently, all metals.

Gold consolidates levels above 1,270

XAUUSD daily chart May 22

Gold found support at 1,269 on Tuesday, and it is now trading positive on Wednesday, but fundamental and political factors limit the movement.

As Oanda analyst Jeffrey Halley said in a recent note to clients, “a stronger dollar and Washington’s extension to Huawei for three months has put the knife into gold,”

Currently, gold is trading 0.03% positive on the day at 1,275. XAU/USD is now 2.4% below of its May 14 máximum of 1,303, and over 5% down from its February peak at 1,346.

If the pair loses the 1,270, it will face the critical support of 1,266. Below there, the 200-day moving average will wait for the unit at 1,257. Then, 1,250 and 1,240 are the next buying zones.

Copper declines further after breaking below 2.700

Copper Daily Chart May 22

After several attempts in the last week, Copper has finally broken the 2.700 support, and it is now extending losses to fresh minimums since January 29 at 2.670.

Technical conditions are unfavorable for the mineral as the unit is trading down for its fourth negative day in a row. XCU/USD is currently moving 1.20% down in the day at 2.673. The unit is now trading 10.7% down from its April 17 peak at 2.990.

If the pair extends decline beyond the 2.670, it will find supports at 2.625, 2.605 and 2.530.

Platinum resumes its decline

XPTUSD daily chart May 22

After a brief bounce from 807.00 to 820.00 performed on May 21, Platinum resumed its downtrend on Wednesday with the unit losing all the recovery gained on Tuesday.

XPTUSD is now trading as low as 806.40, 1.20% down in the day. The metal is now heading to test the psychological level of 800.00, and it seems a matter of time to reach it.

Below there, Platinum investors will find support at 790.00 and 780.00.

This article was originally posted on FX Empire