Fundamental News and Triggers

• Because of the US dollar’s strengthening and the decrease in geopolitical risk, gold and silver have dramatically declined from their previous highs. Tehran played down what was seen as an escalation of the confrontation following Israel’s April 19 drone strike in retaliation Further weakening gold prices is the fact that market players are starting to factor in the possibility that the Federal Reserve (Fed) will lower rates later than anticipated.
• The Fed’s main inflation indicator, the March PCE Price Index, will be released this week, which is significant for the US economy. If the data is lower than anticipated, gold traders could buy the yellow metal with the goal of resetting all-time highs. If not, rising prices may support US Treasury rates and the US dollar, which would be detrimental to the non-yielding metal.

Technical Triggers

• As forecasted, gold prices have fallen 5.5% to $2310 (Rs 70500) now after touching a high of $2448 (~Rs 74000) in the first week of April and trading stable last week as Middle East tensions ease. Even Silver prices have fallen 10% to $27 (~Rs 80000) now after touching a high of $30 (~Rs 86000).
• A “bearish engulfing” chart pattern was formed by the sharp drop in gold and silver prices, paving the way for a further decline.

 

Support and Resistance

 

 

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