Gold Technical Report: Gold prices opened witnessed volatility on account of profit booking on Friday on the backdrop of a 3 white soldiers pattern on daily charts. However, it managed to settle near 10 Day Moving Average (DMA) in @2005. Both 10 DMA and 50 DMA @1910 are trading above 200 DMA @1794 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 60 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 58 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also following suit, corrected on Friday after a long rally towards making a 12-month high earlier. It has strong support near the common area of 100 DMA @22.90 and 50 DMA @22.48. The medium-term trend looks bullish as both of these averages are above 200 DMA @21.21. The Short term Stochastics Oscillator is at 75 and Relative Strength Index is near 70.
Fundamental Report: The Gold markets have initially rallied a bit during last week, reaching near the $2050 level. However, slid down by almost $ 50 during the week. Gold price action suggests investor indecision and impending volatility. Traders are currently thinking about two possible scenarios for the Federal Reserve’s response to US Inflation (CPI and PPI) reports from last week. The first scenario is that the Fed will increase rates by 25 basis points at their May 3 meeting and then stop raising rates further. The second scenario is that the Fed will raise rates and suggest that they will need to raise rates again in June. Last week, Minutes from the Federal Reserve’s March Monetary Policy Meeting revealed policymakers for the first time predicted a “recession”, starting later this year – with a recovery by 2025 at the earliest. The Minutes showed that several members of the Federal Open Market Committee were convinced that recessionary risks have been reignited following the crisis in the banking system – that led to the collapse of several prominent banks from Silicon Valley Bank to Signature Bank as well as the disorderly implosion of Credit Suisse. The turmoil has stoked fears that banks could be overwhelmed by waves of withdrawals or “bank runs,” resulting in stricter lending conditions for borrowers – triggering a “global credit crunch” and ultimately a recession.