Silver (XAG) is slightly more vulnerable as it is both a safe-haven and industrial commodity. The dollar can have a negative impact on silver, but expectations of future interest rate hikes may constrain gains in the short term. Silver may continue to face pressure if oil related inflation continues to put pressure on the global economy due to weakness in industrial demand. However, if gold settles down and the dollar continues to fall, silver will rebound quickly because its long-term bullish trend is supported by inflation, liquidity and hard asset demand.
Gold Technical Analysis: Consolidation Below Key Resistance Continues
The daily chart for spot gold shows strong consolidation below the key level of $4,900. A failure to break above $4,900 will keep the consolidation between $4,400 and $4,800. A break above $4,900 will open the door for strong upside towards the $5,200 area. However, a break below $4,600 will indicate further downside towards $4,400.
