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'Both gold and silver are now oversold': Commerzbank

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(Kitco News) After a week of losses, gold and silver prices are now oversold, says Commerzbank. “The RSI for gold and silver this morning was 31 and 25 respectively – levels last seen during the sell-off in mid-March. Back then, prices rose sharply a short time after,” writes Commerzbank commodity analyst Carsten Fritsch. Gold lost around $100 since Monday, hitting two-month lows this week and touching $1,850 an ounce Thursday morning. Silver tumbled nearly 20% this week, briefly touching $21.70 an ounce on Thursday morning. A price reversal is looking very likely for precious metals, Fritsch notes. “The fact that the 100-day moving averages have now been reached could form the basis for a countermovement that is certainly due. It is obvious in our opinion that prices are more likely to be significantly higher than lower in the coming weeks,” he says. “After all, the positive environment for gold and silver hasn’t changed since the beginning of the week. It is doubtful to say the least that the U.S. dollar will be able to defend or even extend its latest gains given that the monetary policy of the U.S. Federal Reserve will remain ultra-expansionary for years to come.”

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