Gold Is Stable As Yields And The Dollar Remain Under Pressure

Following silver's significant drop on Monday, both precious metals have managed to stabilize the ship, suggesting that the move at the start of the week was most likely a bear trap.

The US dollar has recovered against the Canadian dollar as a result of the Bank of Canada's 25-basis-point rate boost, with its governor stating that interest rates would remain unchanged as the bank examined the effect of the cumulative interest rate hikes.

However, currencies such as the pound, euro, and yen continue to be supported versus the US dollar. This is assisting in the support of buck-denominated metals.

Investors are becoming more convinced that more central banks will pause interest rate increases in the near future, as more evidence emerges that global inflation is moderating - while the picture remains hazy and there have been some surprises here and there (and Down Under overnight).

So, gold is still supported by the belief that rate rises are on their way out, but considering the spectacular gains over the last two and a half months, some would argue that most of the good news has already been priced in.

However, the trend remains positive and fading the dips will continue to be the dominating approach until we witness a big reversal pattern in the gold or silver charts.

Gold has found support around $1920, a level that had previously functioned as resistance. As long as the pattern of higher lows and higher highs is not broken, the path of least resistance continues to the upside, and a run toward $2,000 cannot be ruled out.

The most current low price is $1896. In the near run, this will be the dividing line.