Gold Technical Report: Gold prices, moved up sharply and posted a jump of almost 50 dollars on Friday on intra day basis. Gold also crossed above 10 Day Moving Average (DMA) @ 1834. Since 50 DMA @ 1866 is trading over 200 DMA @ 1775, 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 50 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 60 (it is considered overbought when above 70 and oversold when below 30) .
Silver Technical Report: The silver prices also following the gold prices moved up but fell short of 200 DMA@ 20.89. The medium term trend can be considered up only if the prices move above 100 DMA @ 22.10. The Short term Stochastics Oscillator is at 23 and Relative Strength Index near 42.
Fundamental Report: At first, it was only the more hawkish faction including Mary Daly and James Bullard which both recommended a more aggressive stance containing a 50-bps rate hike this month. It was not long after that the more conservative faction of Federal Reserve officials moved into that camp and this report was the line in the sand that would either seal the deal of ½% rate hike or cause them to abandon it. While market participants had braced themselves for an unexpected result with a robust jobs report which Fed officials warned would lead to a larger interest rate hike, the unexpected outcome was that it now is most likely that the Fed will only raise rates by ¼%. Truly an unexpected outcome but not because of the number of new jobs added to payroll last month but rather a change in the unemployment rate that no one had anticipated.
The US Dollar has come under renewed selling pressure in Asia this Monday after Goldman Sachs revised downward its expectations of the US Federal Reserve (Fed) rate hike outlook, in the face of the Silicon Valley Bank (SBV) fallout. As US Treasury Department and Fed unveil action plan on Silicon Valley Bank fallout, the US authorities are in action mode to defend the world’s largest economy from another financial crisis. “In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March.” The report further says, “We expect US regulators’ actions to provide significant liquidity to banks facing deposit outflows and to boost depositor confidence.” A cessation of rate rises and a weakening US financial sector may finally be too much to the idea of the Greenback remaining the safe-haven currency. Especially, when the problems are of its own making. The US dollar is backed by the world’s largest economy that is facing risk of default on its debt, massive trade and fiscal deficits, and rampant inflation with manufacturing and housing industry recessions already underway. While investing heavily in the conflict in Ukraine. This is a lot for a currency to bare.