Political Risks Boost The Precious Metals Prices

Once again, if you have been following our previous reports especially about Gold and Silver, you would be able to explain why and how metals recovered back up after declining significantly last month.

In the past few weeks, we were confident that Gold and Silver are likely to recover most of the recent declines, despite the fact that many fundamentals and technical signals were showing the possibility of deeper declines.

Gold and Silver finally recovered their recent declines, nearing this year’s high and both proved that they are strong enough for a potential rally ahead.

Catalysts

There were many catalysts for the recent rally, but what was interesting is that the events that happened the past month were a positive factor for metals, in addition to the economic releases that came in contrary to the market estimates.

One of the catalysts is the continuous decline in the US Dollar Index, which fell all the way back to 96.50 earlier this morning, and this is the lowest level since November.

Besides USD declines, the US economic releases came in with shocking slowing down.

The US Jobs Report came in contrary to the market estimates. The unemployment rate kept on sliding to new levels, haven’t seen since the financial crises, but what matters for the Fed is the wages growth in addition to the growth of new jobs.

The numbers showed that the jobs creation pace has slowed down significantly, as there were significant downward revisions to the previous figures, including March and April.

Such revisions have eased the possibility for a rate hike by the Fed in June, leading traders and investors to rush to safe haven assets including Gold and Silver.

Where Do We Go From Here

In the meantime, the uptrend is here to stay. However, traders need to keep an eye on some political events which may keep metals on the rise in the coming days.

Tomorrow, we will be waiting for the British general election, where the conservative party is set to win the election. However, the public polls were wrong about Brexit and the previous elections.