Gold Technical Report: Gold prices, moved up further for the third consecutive day. Gold has recovered almost 100 USD in the last 3 trading sessions and also posted a 3 white soldiers pattern on daily charts. Gold yesterday received buying support near 50 Day Moving Average (DMA) @1872. Since both 10 DMA @1851 and 50 DMA are 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 77 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 63 (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 and forcefully crossed above 200 DMA@20.90. The medium-term trend can be considered up only if the prices move above 100 DMA @22.12. The Short term Stochastics Oscillator is at 52 and Relative Strength Index is near 54.
Fundamental Report: Gold has gained almost $100 in the last couple of trading sessions as investors fearing bank meltdown issues to worsen further, flock to safe heaven assets. Gold’s dramatic rise is largely the byproduct of a potential banking crisis with two banks showing “systemic risk” according to bank regulators. California’s Silicon Valley Bank and Signature Bank of New York required immediate action over the weekend to protect depositors’ capital. The banking meltdown resulted in the two-year Treasury yields having the largest three-day decline since black Monday in 1987. Gold’s dramatic gain over the last two days was a combination of investors and large money managers flocking to gold as a haven asset, dollar weakness, and the belief that the Federal Reserve could pivot its aggressive interest rate hikes. Market participants are under the assumption that the Federal Reserve may pivot by not implementing the anticipated ¼% rate hike at the March FOMC meeting. Some investors are under the assumption that the Federal Reserve might pivot and cut rates. The US Dollar has come under renewed selling pressure 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 crisisA 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 their own making. The US dollar is backed by the world’s largest economy that is facing a 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.