Daily Report – 18 March 2024

Daily Gold and Silver Market Analysis
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 dropped to over one-week low amid reduced Fed rate cut expectations. The stronger inflation data released from the US last week fuelled speculations that the Federal Reserve (Fed) will stick to its higher-for-longer interest rates narrative. The outlook remains supportive of elevated US Treasury bond yields, which, in turn, acts as a tailwind for the US Dollar (USD) and undermines the non-yielding yellow metal. The markets, however, are still pricing in a greater chance that the Fed will start cutting interest rates in June. This, along with geopolitical risks, should help limit the downside for the safe-haven Gold price and should limit deeper losses. Traders might also prefer to wait for more cues about the Fed’s rate-cut path before placing fresh directional bets. Hence, the focus remains glued to the outcome of the highly anticipated two-day FOMC monetary policy meeting, scheduled to be announced on Wednesday.

Gold

Price decline below the current prices could accelerate the fall to the next relevant support near the $2,128. The corrective slide could extend further towards the $2,100 round figure, which should act as a strong base for the XAU/USD. On the flip side, the $2,175 now seems to have emerged as an immediate strong barrier, which if cleared should allow the Gold price to challenge the record peak, around the $2,195 area touched last week. Some follow-through buying beyond the $2,200 mark will set the stage for the resumption of the uptrend witnessed since the beginning of this month. The short term Stochastics Oscillator is at 76 and Relative Strength Index is at 64.

Silver

Silver ended last week on a high note, closing at $25.16, marking an increase of $0.87 or 3.60%. This upward movement significantly contrasted with gold’s modest decline. The trend propels silver towards testing recent highs of $25.40 and $25.53. To maintain uptrend silver needs to stay above the $24.86 level in the upcoming trading sessions. The weekly close above the $25.00 level has given strong signal and may lead it to test further resistance at $25.40 – $25.53. The short term Stochastics Oscillator is at 88 and Relative Strength Index (RSI) is at 67.