Gold Technical Report: Gold prices retraced on Friday and closed below closed above the 10 Day Moving Average (DMA) @1970. Both 10 DMA and 50 DMA @1893 are trading over 200 DMA @1784 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 51 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 56 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices managed to stay positive on the last trading day of the week and closed near a two-month high. It has strong support near the common area of 100 DMA @22.55 and 50 DMA @22.17. The medium-term trend looks bullish as both of these averages are above 200 DMA @20.99. The Short term Stochastics Oscillator is at 87 and Relative Strength Index is near 65.
Fundamental Report: Friday saw markets conclude what was a turbulent quarter, albeit an upbeat one for global equities. The week ended with a look at the Fed’s preferred measure of inflation—the personal consumption expenditures price index excluding food and energy (for February)—showing that prices rose less than expected at 0.3% (vs 0.4% forecast and a touch lower than January’s 0.5% reading). The YoY measure for February also came in lower than anticipated at 4.6% (vs 4.7% expected). US equity indices gapped higher at the cash open following the release; the S&P 500, in the shape of a near-full-bodied daily bullish candle, added 1.4%, and the Nasdaq 100 cemented its position north of YTD pinnacles to 13,181 (+1.7%). The recent banking turmoil shook Q1, though does appear to be receding. Despite the collapse of Silicon Valley Bank and Signature Bank and UBS’s rescue of Credit Suisse, Q1 ended well and truly on the front foot in the equities space. The dollar, however, was a notable victim in March (-2.3% [Dollar Index]) as market participants felt that the recent banking concerns would lead the Fed to pause rate hikes, thus weighing on demand for the buck. Market pricing for the upcoming Fed meeting on 3 May shows a 58% probability of another 25bp increase over a 42% chance that the central bank presses the pause button and holds rates steady. Furthermore, current market pricing shows a possible 50bp cut by the year’s end. Looking ahead as we step into the first full week of April, Monday welcomes the latest US Purchasing Managers Index (PMI) during the early hours of US trading. This release surveys purchasing managers to assess economic health and is a leading indicator. Therefore, this will be a closely watched release this week. Friday will also see the latest US employment situation report, which is expected to reveal an increase of 240,000 new payrolls (versus last month’s stronger-than-expected 311,000 print). Unemployment is expected to remain steady at 3.6%. Importantly, though, the NFP release comes when most major banking institutions close their doors to observe Good Friday. So, the market response could be limited, though bear in mind that with thin liquidity, any reaction could magnify volatility.