Yesterday, US retail sales figures disappointed and the USD index hit lows it hadn’t seen since February. With stops being triggered at the psychological level of $1,200, gold was able to explode upwards before making a high on the day at the 200 day moving average of $1,217.80. Weak US PPI figures this morning have provided extra legs for gold and it is now firmly above its 200 DMA. The disappointing US data over the past few days indicates less of an incentive for the Fed to tighten rates which is bullish for the precious metals. Gold’s near term target above the market is $1,240 while dips will likely be supported around the 200 DMA.
Silver has had an even better run than gold and is up over 7% in the last three trading days. It achieved a close above its 200 day moving average yesterday, a level it hadn’t cleanly broken since August of 2014, which has encouraged traders to add to long positions today.