Gold Technical Report: The near-term technical outlook for Gold price remains more or less the same, with a correction expected anytime soon, the 14-day Relative Strength Index (RSI) continues to remain in a highly overbought zone. If Gold sellers jump in, Gold price could test the initial support at $2,144, the previous day’s low. The next cushion is seen at $2,127, the intersection of Wednesday’s low and the 23.6% Fibonacci Retracement (Fibo) level of the recent rally from the February 14 low of $1,984 to the all-time high of $2,170. A sustained break below that level could help Gold sellers flex their muscles toward the $2,100 threshold. However, any retracement in Gold price could be seen as a good dip-buying opportunity, as the 21-day Simple Moving Average (SMA) and the 50-day SMA Bull Cross remains in play.
On the flip side, Gold buyers need to capture the $2,200 threshold for them to sustain the uptrend. Ahead of that, the record high at $2,170 and the $2,180 resistance will come into play.
The short term Stochastics Oscillator is at 98 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 83 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up parallely for second straight session yesterday after it witnessed a correction , a day before. Last week it crossed above 10, 50 and 100 days EMA in a single day. The recent upmoves in the past were capped around 23.40, near 200 days Exponential Moving Average, which will now act as a support. The Short term Stochastics Oscillator is at 86 and Relative Strength Index near 66.
Fundamental Report: The dovish commentary from central bank policymakers creates a tailwind for the yellow metal. The Fed Chair Jerome Powell said the US central bank is “not far” from gaining enough confidence that inflation will reach its 2% target to begin lowering interest rates. Investors will take more cues from the US Nonfarm Payrolls (NFP) data on Friday for fresh impetus, which is expected to see 198,000 jobs added to the US economy. However, the stronger-than-expected data might lift the Greenback and exert some selling pressure on the gold price.
Meanwhile, European Central Bank (ECB) Christine Lagarde indicated the ECB may ease policy in its June meeting. The ECB maintained its benchmark rate unchanged at 4.0% at its March meeting on Thursday, but it lowered its inflation forecast for 2024 from 2.7% to 2.3%, indicating the central bank opened the door to possible rate cuts in the coming months.
Furthermore, Chinese investors purchased the yellow metal as a safe place to keep their cash after the property sector and stock markets in China tumbled. The escalating geopolitical tensions in the Middle East might be attributed to the demand for traditional safe-haven assets as well.
Gold traders will closely watch the Eurozone Gross Domestic Product (GDP) for the fourth quarter (GDP). On the US docket, the February labor market data, including Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings will be released. Traders will take cues from the data and find trading opportunities around the Gold price.