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 came under some renewed selling pressure on Thursday and dropped back closer to the weekly low in reaction to the hotter-than-expected US Producer Price Index (PPI). The data pointed to still-sticky inflation and cooled market expectations for early interest rate cuts by the Federal Reserve. This, in turn, triggered a fresh leg up in the US Treasury bond yields and boosted the US Dollar, which turned out to be a key factor that drove flows away from the non-yielding yellow metal. The markets, however, are still pricing in a greater chance that the US central bank will start cutting interest rates in June. This, along with the risk-off impulse, assisted the Gold price to attract some buyers ahead of the $2,150 level ahead of the FOMC meeting next week.
Gold
Prices remained upwardly biased as it has consolidated near the $2,160-$2,180 area during the last three days, unable to break the top of the range and aim toward $2,200.00. It should be said that the Relative Strength Index (RSI) indicator is about to pierce below the 70 mark, an indication that buyers are losing momentum. In that event, XAU/US could dive toward $2,150.00. Further downside is seen at the March 6 low of $2,123, followed by $2,100.00. On the other hand, a bullish continuation would happen once buyers reclaim the March 12 high of $2,186. The next stop would be the year-to-date high of $2,195, followed by $2,200.00. The short term Stochastics Oscillator is at 84 and Relative Strength Index is at 71.
Silver
Silver lost ground as traders focus on rising Treasury yields and stronger dollar. The current pullback looks healthy after the strong rally, but silver needs to stay above the $24.60 – $24.40 level to have a chance to gain upside momentum in the upcoming trading sessions. A sustained move above the $25.00 level will open the way to the test of the resistance at $25.40 – $25.53. The short term Stochastics Oscillator is at 95 and Relative Strength Index (RSI) is at 69.
Indicator Definitions
Conclusion
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.