Today’s analysis provides an in-depth look at the gold and silver markets, offering insights into the fundamental and technical factors driving current trends. Our report aims to equip investors with the knowledge needed to navigate these markets effectively.
Fundamental Analysis
Gold prices recovered on Wednesday after a pullback to the $2,150.00 region, as markets seem convinced that the US Federal Reserve (Fed) could cut borrowing costs. Nevertheless, the latest hotter-than-expected inflation report in the United States might deter Fed officials from easing policy in June, contradicting market participants’ speculation. Therefore, the XAU/USD trades at $2,173.60, gaining 0.7%. The latest US economic data CPI suggests the economy remains robust, even though the labor market is cooling. Nevertheless, headline and underlying inflation remaining above 3.2% in the twelve months to February might push back some Fed officials’ intentions to cut borrowing costs. Last week, US Federal Reserve Chair Jerome Powell said the central bank is ready to ease policy if conditions are met and the disinflation process continues. He emphasized that they are data-dependent, in no rush to begin the trimming cycle, and would like to see more evidence of the evolution of the disinflation process.
Gold
Prices rebounded from near 2150 support, where the March 7 low and Fibonacci Retracement level of the recent rally from the February 14 low of 1984 to the all-time high of 2195 coincide. The upswing occurred, as the 14-day Relative Strength Index (RSI) eased from the extremely overbought region to near 72, where it now wavers. If the metal regains the all-time highs of 2195, the next key upside targets are seen at the 2200 threshold and the 2250 psychological level. Conversely, the initial demand area is seen at Wednesday’s low of 2155. A failure to defend that level will test the 10 Days EMA support at 2143. Further down, the static support at 2125 will come to the buyers’ rescue. The short-term Stochastics Oscillator is at 83 and Relative Strength Index is at 72.
Silver
Silver rallied as gold/silver ratio declined towards the 87 levels from yesterday’s reading of 89. It looks that traders realized that high gold/silver ratio presented an opportunity to purchase silver at attractive levels. This benefited the white metal to cross psychological highs of 25.00 briefly before settling down just below. A sustained move above the $25.00 level will open the way to the test of the resistance at $25.75 – $26.00. If silver falls much below the $25.00 level, it will head towards the nearest support at 24.65 and then 24.33. The short term Stochastics Oscillator is at 57 and Relative Strength Index (RSI) is at 62.
Indicator Definitions
In the complex and ever-evolving landscape of bullion markets, staying informed with both technical and fundamental analysis is crucial for making well-informed investment decisions. Our report strives to provide a balanced view to assist investors in navigating the intricacies of gold and silver trading.