Gold and silver climb on a weaker US dollar

Gold rises closer to USD2000-level

Gold and silver enjoyed a modestly positive overnight session, as they consolidated their substantial gains from the day before. That strength has accelerated in Asia though, as the US dollar weakened notably in the Asia morning session. Gold has climbed 1.0% to USD1987.00 an ounce and silver has risen 2.0% to USD28.70 an ounce.

Both metals look poised now to test resistances at $2000.00 and $29.00 an ounce respectively, with momentum notably picking up strength. The precious metal rally is as much of a dollar weakness story as anything. With US yields continuing to edge lower, further eroding dollar strength, the planets are aligning for further gains by both metals on both a short, and long-term basis.

Robust China data lifts oil in Asia

The sunshine cast by China’s PMI data across other asset classes has also fallen on oil. Both Brent crude and WTI are 0.50% higher in Asia after trading sideways overnight. The apparently healthy recovery in China, and a steady improvement across the rest of the Asia-Pacific has lifted consumption hopes which have flowed into higher prices today.

Brent crude has risen to USD45.75 a barrel, just above its 200-day moving average (DMA) at USD45.70, that has capped rallies of late. Having spiked briefly above USD46.00 overnight, Brent crude’s initial target is the USD46.50 a barrel, recent highs. A daily close above the 200-DMA would be a positive technical development, and a move through USD46.50 a barrel opens up further gains to USD48.00 a barrel.

WTI has risen to USD43.00 a barrel in Asian trading and initially targets its overnight highs around USD43.50. A move through that level should inspire further gains to USD44.00 a barrel, with a daily close above there opening up a much larger rally to USD48.00 a barrel.

Having long been on investors’ radars, oil markets are well overdue a day in the sun. Today’s China data and a consistently weaker US dollar could be that catalyst.

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