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Gold Up On Weak European Data, Silver Shows Signs Of Exhaustion

Mauricio Carrillo

Commodities are trading mixed on the last day of the week as investors are digesting poor economic data in the Eurozone.

At the same time, USD is gaining ground, while Silver is showing some exhaustion, and Palladium paused its long-tail rally.

Euro data adds concerns on global economy slowdown

PMI data in the European Union came below expectations, adding pressure on global economic slowdown concerns.

In the Euro area, the Market Manufacturing PMI declined to 47.6 in March, against expectations of a slight recovery from 49.3 in February to the expected 49.5.

The manufacturing sector number is bad for the economy as it is signaling more slowness in the European economy. Remember that any PMI number below 50 signals contraction in the sector, while a figure above 50 shows expansion.

PMI Services in the Eurozone decline from 52.8 in February to 52.7 in March, data came in line of expectations.

USD extends bounce to 1-week highs

The DXY is another factor affecting commodities as a strong USD would push Gold down.

So, the dollar index is trading positive for the second day as the DXY is extending its bounce from 95.80, where it touched a dynamic support which comes from September 2018 and January 2019.

DXY is now trading 0.37% positive on the day at 96.71, after peaking at 96.80, its highest level since March 14.

Gold posts gains after a turnaround Thursday

XAUUSD Daily chart Gold March 22

Gold is trading positive on Friday as investors are digesting weak economic data in the Eurozone. However, it looks like the XAU/USD is ready to give up some gains in the short term.

The weak data in the Eurozone is fueling gold today despite a stronger US Dollar Index. “Weak data means lower interest rates in the Euro Zone and lower rates tend to be bullish for gold,” FX Empire Analyst James Hyerczyk highlighted in a recent article.

The yellow metal rallied on Thursday to its highest level in March at 1,320; however, it got a rejection at that level and fell to trade as low as 1,306 on Friday.

Then the pair managed to recover ground, and it is currently trading 0.15% positive on the day at 1,311.

The pair is just above the confluence of 20 and 50 days moving averages and a dynamic short term support coming from March 7 and right now at 1,305.

On the week, XAU/USD is set to close its third positive week in a row as pair is extending its bounce from 1,280 and consolidating levels above 1,310.

Silver down on the day, technical picture suggest a slight decline

XAGUSD Daily chart Silver March 22

Silver is trading down on Friday as the chart is showing some signs of exhaustion with overbought levels after a doji daily candle performed on Thursday.

On Thursday, silver jumped to 15.65, its highest level since March 1. However, the pair could sustain gains, and it fell to today’s lows at 15.40.

XAG/USD is currently trading at 15.40, 0.25% negative on the day. Next supports are at 15.20 and 15.00.

Stop the press! Palladium is falling

Palladium is falling on Friday for the first time in ten days as investors are pausing in its rally and closing positions on the last day of the week.

The XPD/USD is a normal movement as traders prefer to cash out gains ahead of the weekend. The most natural support for the palladium is now the 1,570.

Currently, Palladium is trading at 1,580, 1,30% negative on the day. However, the weekly picture is quite different with 1.8% weekly gains.

XPD/USD is performing its second positive day in a row, its sixth green week in the last seven. All because of supply concerns.

This article was originally posted on FX Empire

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