Gold Technical Report: Gold looked a bit tired at the end of the week and posted a red candle after two consecutive bullish candles earlier. It may see renewed buying near the trendline support @1938 which acted as a resistance before this rally. The10 Day Moving Average (DMA) is @1955 and 50 DMA is @1889. Since both 10 DMA and 50 DMA are trading over 200 DMA @1781, 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 63 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 62 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices continued the march ahead and closed in the green for the third consecutive day to end the week. It has strong support near 100 DMA @22.42 and 50 DMA converge points @22.20. The medium-term trend looks bullish as both of these averages are above 200 DMA @20.94. The Short term Stochastics Oscillator is at 85 and Relative Strength Index is near 64.
Fundamental Report: Gold prices experienced a decline on Friday due to a stronger US dollar, steady US Treasury yields, and a demand for higher-risk assets, after hitting a high of over $2,000 last week on fears regarding the banking sector. On Friday, SPDR Gold Shares ETF (GLD) settled at $183.65, down $2.09 or -1.13%. Despite this dip, concerns regarding undercapitalized US banks are expected to continue to underpin gold prices. The market is currently pricing in a nearly 90% chance of the Fed standing pat on interest rates at its May meeting, but the precious metal is likely to receive continued support from major macro developments. While higher interest rates tend to discourage investment in non-yielding bullion, long-term concerns regarding the stability of the banking sector and potential economic fallout could continue to support demand for gold as a safe haven asset. Overall, investors seeking a safe haven amid market volatility and economic uncertainty may continue to view gold as an attractive asset. In the short term, gold prices may be volatile due to a stronger US dollar, steady US Treasury yields, and a demand for higher-risk assets, but long-term demand for gold is likely to remain strong. On Friday, Banking majors like Deutsche Bank and UBS were hit by concerns that regulators and central banks had not contained the worst shock to the sector since the 2008 financial crisis. This also impacted gold prices, which tend to rise with concerns about undercapitalized banks. However, Fed officials noted that financial stress did not appear to be worsening at their policy meeting this week, allowing them to focus on lowering inflation through another interest rate increase. The central bank went on to raise rates by a quarter of a percentage point but indicated that it was close to pausing. Federal Reserve officials concluded that the recent bank collapse and other events did not undermine confidence in the strength of the US banking system. Three regional Fed bank presidents dismissed the collapse of Silicon Valley Bank as a “quirky situation”. St. Louis Fed President James Bullard raised his estimate of how high the Fed’s benchmark overnight interest rate needs to rise. Other policymakers agreed that no broadening crisis would require the Fed to back away from another rate increase. The Fed has a 2% inflation target, and its main indicator of inflation is currently running at double that pace.