Jitters about the banking crisis in the United States has sent the GOLD prices to a time high last week. Gold prices rose above 60K as after, dollar headed for its longest losing streak in 2-1/2 years after the U.S. Federal Reserve sounded close to calling time on interest rate hikes. While the Swiss National Bank and Bank of England pushed ahead with further rate increases.
The Fed hiked interest rates by 25 basis points on Wednesday, but softened its rhetoric on tightening monetary policy- signaling that it may be considering an eventual pause in rate hike to prevent further economic headwinds. The bank also trimmed its growth forecast for the year.
Further, U.S. Treasury yields tumbled overnight, and were muted in Asian trade, benefiting metal prices. Bullion prices had surged to a one-year high last week, surpassing the $2,000 level amid fears of a banking crisis. But regulators intervened to soothe market anxiety and restore faith in the banking system, which saw gold consolidate some recent gains.
However, on the weekend yellow metals gave up nearly half percent, as the dollar recovered moderately on higher fthan-expected U.S. factory data. Also, signs of strong foreign demand for dollars are bullish for the greenback. After the Federal Reserve facility that gives foreign central banks access to dollar funding was tapped for a record $60 billion in the week through March 22.
Technical Outlook
Gold prices made a high of 60455 that was a time high. However, prices retreated and settled at 59273. And down by 0.19% as compared to the previous week’s close of 59383.
Weekly price action resulted in formation of high wave candlestick which is indicating indecisiveness in near future. However, prices are still trading above its previous swing high of 58420,coinciding with 50% Fibonacci Retracement which is still indicated for bullish momentum in the near future.
Hence, it’s expected that bullish momentum will continue, and any dip towards 58550-58400 will attract near future buying activities. Projected target would be 59500-60000.
Alternatively, on the downside immediate support is seen at 58200. And a break below it prices may retreat towards 57500-57000.