Fundamental News and Triggers

• Following the initial tariff pronouncements in the United States, investors thought that the worst of the uncertainty would pass. Instead, the reality has proven to be more severe. With tariffs exceeding forecasts and little indication of discussions, markets are rapidly pricing in the prospect of a worldwide recession, beginning with the United States. The risk-off mood has resulted in widespread liquidation across asset classes. Traditional safe havens like gold have not been spared.
• Despite the short-term fear, the medium- to long-term outlook for gold remains favourable. The current climate, which is characterized by volatility, economic uncertainty, and central bank buying, tends to favour gold.
• Fed Chair Jerome Powell repeated the Fed’s “wait-and-see” approach to the emerging volatility last week. The announcement of the March CPI this week will be key. If inflation data continues to soften, it may bolster the case for further rate reduction, thus reigniting demand for gold.

Technical Triggers

• The gold active June contract has significant support at $3000 (~Rs 87000). However, if prices remain below $3000, they may fall below $2900 (~Rs 84500).
• Silver has excellent support at $29 (about Rs 87000). I do not believe Silver can remain below this level. Every decline below $30 (~Rs 89000) should be viewed as a buying opportunity for targets of $32 (~Rs 94000).

Support and Resistance

 

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