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Metals - further consolidation ahead ?

Commentaries & Views

Gold tagged major resistance at $1,915 overnight, and silver made it to $24.30; both have since turned back down but, so far today, have found support at higher prices yet again. Gold is offered around $1,900 and silver $24.20 in early trading Tuesday. The strength in platinum and palladium persist, having also found support at higher levels. Platinum is offered at $1090 and palladium $2400 early in the session.

Gold has added $120 from its Jan. 24 low to last night’s high. It would be reasonable to expect sellers to step in more aggressively at the $1,915 level, leading to a deeper consolidation in the complex. An approximate $40 price range somewhere between $1875 and 1915 would not be surprising.

Stock futures were under pressure all day yesterday and catapulted lower following late news of Russia moving in on eastern Ukraine. However, those late losses have since reversed, and stock futures are now pointing to a mostly flat open.

The reversal in equities and resistance in gold could be showing that the worst of the geopolitical tensions are now in the past, and the perpetual catalyst of monetary policy expectation is ready to return to the spotlight.

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