40 years of high inflation risk aversion geopolitical uncertainty creates the perfect storm scenario for precious metals

A series of events have led to an overall rise in today's precious metals market. Three main concerns have boosted bullish sentiment that the precious metals market is already playing, but today it appears that these concerns have been amplified.

fx896.com News: The main concern is the current level of inflation in the United States, which is 7% according to the latest data provided by the government. The last time inflationary pressures were so high was 40 years ago, in 1982. In addition, market participants are watching for inflation concerns about the Fed's upcoming action at the upcoming FOMC meeting, which will end today for a full week. Liftoff, a term used to describe the start of a rate hike, is almost certain. Suppose the Fed will announce the date of starting rate hikes at next week's FOMC. According to CME Group's FedWatch tool, the probability of a first rate hike in March this year is 94%.

There is no doubt that American companies have become addicted to borrowing money for free. The perception that this monetary policy, which the Fed has set to rebuild the U.S. economy, is coming to an end is now fading. U.S. stocks have been under pressure, with four of the last five trades falling.

In this case, the NASDAQ composite has fallen by more than 6% since January 12, and the technology-dominated index has fallen by more than 6%. This S&P is down about 4.2 percent, and the Dow Jones Industrial Average is down about 3.61 percent.

Finally, although a small part of the recent shift in market sentiment in the U.S. stock and precious metals markets is geopolitical tensions that have intensified as Russian troops continue to deploy along the Ukrainian border.

Any of these three factors could have a huge impact on market sentiment in the U.S. stock market and precious metals markets. However, the combination of all three factors present at the same time created a perfect storm environment that allowed today's precious metals to rise sharply.

Palladium rose 5.09 percent in today's trading, the largest percentage gain among the four precious metals traded on futures exchanges. After taking into account the $96.90 gain, palladium futures are currently fixed at $2001.50. Platinum futures rose 4.58% and are currently fixed at $1024.40 after taking into account today's $44.90 gain. Taking into account today's $0.70 gain, silver futures rose 2.99%, the most active March futures contract to reach $24.195. Finally, on the basis of gold futures, the most active February contract is currently fixed at $1840.70 after rising $28.30 or 1.56%. Today all precious metals saw a strong upside breakout, with gold breaking through the current resistance level of $1833. Our current technical research suggests that the next resistance is at $1851.60. Research also suggests that the front resistance could become the new support at $1830.