Gold Technical Report: Gold prices slided down yesterday from the intra day high and closed in red. During last 12 trading sessions, markets failed to close above 10 Day Moving Average (DMA) @ 1989. Both 10 DMA and 50 DMA @ 1939 are trading above 200 DMA @ 1808 hence, the medium term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short term Stochastics Oscillator is at 36 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 50 (it is considered overbought when above 70 and oversold when below 30) .
Silver Technical Report: The silver prices witnessed selling pressure as it could not sustain the breakthrough from the the parallel channel of last 2 weeks. It has a strong support near the common area of 100 DMA @ 23.23 and 50 DMA @ 23.17. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.55. The Short term Stochastics Oscillator is at 44 and Relative Strength Index near 57.
Fundamental Report: On Monday the First Republic officially became the fifth major bank to collapse within two months. Global banking fears were reignited again last week after a number of major financial institutions including First Republic, Bank of America, Barclays, Lloyds and Santander raised fresh alarm bells after reporting significantly worse than expected deposit outflows. The U.S regulators seized control of First Republic Bank and sold it to JPMorgan Chase – marking the failure of a fifth major bank within two months – following on from the collapse of Silvergate Capital, Silicon Valley Bank, Signature Bank and Credit Suisse. Economists are convinced that this is just the tip of the iceberg. Conclusive evidence shows the global banking crisis was fuelled as a direct consequence of soaring interest rates – and the turmoil is far from over.
Looking ahead, The Federal Reserve now faces a tricky balancing act as policymakers prepare to deliver their 10th consecutive rate hike. Fed officials have signalled that the FOMC will hike rates by another quarter basis point at its May 2-3 meeting to a range of 5% to 5.25%, the highest since 2007 – reaching levels last seen prior to the 2008 Global Financial Crisis. Clearly conditions right now are very different than they were a year ago when the Federal Reserve embarked on their most aggressive interest rate hiking campaign in history. Banks are failing, risky assets such as equities are wobbling and recession risks are rising fast.