Gold Technical Report: Gold continued the bearish mood of Friday and posted another red candle after two consecutive bullish candles earlier. However, it managed to close just above the10 Day Moving Average (DMA) @1954. Both 10 DMA and 50 DMA @1889 are trading over 200 DMA @1780 hence, 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 56 (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 took a beating after 3 consecutive days of the rally earlier. It has strong support near the common area of 100 DMA @22.44 and 50 DMA @22.17. The medium-term trend looks bullish as both of these averages are above 200 DMA @20.94. The Short term Stochastics Oscillator is at 79 and Relative Strength Index is near 63.
Fundamental Report: Gold prices eased a little as nervousness over the global banking crisis reduces. The primary factor that had increased demand for the precious metal diminished over the weekend. The concern was centered around a banking crisis involving Silicon Valley Bank and Signature Bank of New York spreading to other banks. Over the weekend it was announced that First Citizens Bank reached a deal to purchase the Silicon Valley Bank in Santa Clara. The SVB was closed by California authorities on Friday, March 10. On Sunday, March 26 the FDIC (Federal Deposit Insurance Corporation) announced that the First Citizens Bank & Trust Company of Raleigh, North Carolina had completed a purchase agreement from deposits and loans of the Silicon Valley Bridge Bank. The two-day decline witnessed in gold could be short-lived as market participants focus on statements made by the Federal Reserve last week. For the first time since the Federal Reserve began raising rates, it indicated that its forward monetary policy is about to begin pausing interest rate hikes. Currently, it is anticipated that the Fed will initiate one more ¼% rate hike in May and then begin to pause rate hikes and assess the long-term impacts on inflation from their flurry of rate hikes which began in March 2022. The Fed continues to maintain that its current terminal rate will remain elevated but a pause in hikes is the next best thing to a rate cut. Rate cuts were something that Chairman Powell emphatically stated is not something the Federal Reserve will implement without substantial data confirming that inflation is on a sustained downward trajectory toward their 2% target.