Crucial time for gold
Gold and silver plunged yesterday following the release of hotter-than-expected US inflation data. The news saw the dollar fly higher as the market’s forecast for the number of rate cuts this year was slashed, while the timing of the first was pushed out to June from May. Bear in mind that just a few weeks ago the market was convinced that the Fed’s first rate cut would come next month. The prospect of ‘higher for longer’ saw gold slice below support at $2,000 to close around $1,990 - its lowest close since mid-December. It lost more ground overnight. Silver bulls have also had a torrid time. The metal fell the best part of 4% from yesterday’s high and is currently clinging on to $22 by its fingertips. Could this be the final round of bloodletting before precious metals find a floor, or will gold’s break below $2,000 mean that the path of least resistance is down? It feels as if this is now crunch-time for precious metals.
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