Gold Technical Report: Gold prices, traded continuously upwards for the last week. On Friday, it zoomed up after breaking the trendline near 1936 on daily charts. Also, the metal got renewed buying support as the 10 Day Moving Average (DMA) @1895 crossed above 50 DMA @1881. Since both 10 DMA and 50 DMA are trading over 200 DMA @1778, 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 89 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 75 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also followed suit, moved up forcefully, and crossed both 100 DMA @22.21 and 50 DMA @22.32 in a single stride. The medium-term trend looks bullish as both of these averages are trading above 200 DMA @20.90. The Short term Stochastics Oscillator is at 80 and Relative Strength Index is near 60.
Fundamental Report: On Friday, gold prices surged over 2% due to a series of banking crises reverberating throughout the global markets. As a result, bullion posted its most significant weekly gain in three years. Furthermore, expectations are strengthening for a more tempered approach from the Federal Reserve in their efforts to combat inflation. The SPDR Gold Shares ETF (GLD) is at $183.74, up $5.17 or +2.90%. Gold prices are on the rise due to concerns about potential bad banking news over the weekend, along with expectations that the Federal Reserve may pause its rate hikes next week. The recent failure of Silicon Valley Bank in the United States has highlighted the vulnerability of banks to sharply higher rates, while the market downturn in Credit Suisse shares has contributed to overall market turmoil. Experts expect investors to turn to gold as a safe haven amid this instability. Gold is becoming a more appealing investment option as the dollar and stock markets decline during the current banking sector crisis. Rising interest rates increase the opportunity cost of holding gold, despite its reputation as a hedge against economic uncertainty. Nevertheless, the current economic climate has made it an attractive investment gave the market turmoil. Despite recent turbulence in the banking sector, a Reuters poll of economists indicates that the Federal Reserve will still raise interest rates by 25 basis points on March 22. This decision is expected to affect the gold market, as higher interest rates typically make gold a less attractive investment option. However, given the ongoing market concerns about further banking crises, it remains to be seen how this will impact the gold market.