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  • Precious metals consolidating the volatility on Thursday.  
  • Improved geopolitical optimism a supportive factor for risk appetite, weighing on gold and silver.

After dropping $27.90, or 1.8%, on Wednesday, which was its biggest one-day decline since September 5th, gold prices on Thursday climbed 0.34% between $1500 and $1512 despite a strong Dollar, with the DXY rising a further 0.15%.  The risk of impeachment against U.S. President Donald Trump and continued geopolitical uncertainties are helping to support risk-off asset classes.

Gold for December delivery on Comex added $2.90, or 0.2%, to settle at $1,515.20 an ounce. Spot silver prices were a touch lower, falling from a high of 18.04 to a low of 17.73 and down -0.16% on the day. The gold and silver ratio was higher by 0.62% having travelled between 83.62 and 84.58. December silver SIZ19, -0.68%  fell 16.1 cents, or 0.9%, to $17.912 an ounce.

Geopolitics in focus

The Democrats decided to launch an impeachment inquiry in response to reports that President Trump has withheld aid to Ukraine while he was pressing President Zelenskyy to investigate Democratic presidential candidate Joe Biden and his son. According to Pelosi ‘the actions taken by the President have seriously violated the Constitution.’ While it is highly unlikely that President Trump will be removed from office, it may not bode well for his election campaign. Meanwhile, on the risk positive side of things, Trump said later after signing a limited trade deal with Japanese Prime Minister Shinzo Abe there was a good chance of reaching an agreement with China.

Gold levels

We have been  seeing failures at critical upside levels this week and bears look for a 50% mean reversion of the late June swing lows to recent highs around 1470 ahead of a run to the  19 July swing highs down at 1,452.93. Meanwhile, the 1500 psychological levels is holding up and therefore, bulls can look to the 1535 resistance ahead of the  1,550 target  which guards territories towards 1,590 as the 127.2% Fibo target.

Silver levels

Bears closed below the 21-day moving average once again and bullish attempts were capped at18 the figure. A break of the 17 handle opens risk towards the 16.50s (July resistance) further down. On the way there, we have a 38.2% retracement target at 17.50 and a 50% at 16.80 with the 61.8% down at 16.10. On a run higher, bulls can look to the 19.60s and September  highs.