Gold

Gold prices recovered against some of their recent losses last week with price trading back up above the 1700 level following a prior move below the level. The recovery came amidst a weaker US Dollar which fell in response to softer-than-expected set of inflation readings for February. Headline CPI for the month was in line with market forecasts though core CPI undershot expectations. Given the uptick in inflation expectations over recent months and the growing conversation around the potential need for the Fed to address rising bond yields, the data was a blow for USD bulls and saw the Dollar coming under pressure into the back end of the week.

This week, traders will firstly be focusing on US retail sales for February due on Tuesday. Given the unexpected strength in January’s reading, traders will be keen to see if this was solely down to the stimulus cheques from the US government or if the increase continued last month. Should the reading miss expectations, this is likely to see USD downside pressure continue this week.

Following that reading, Wednesday will see the March FOMC meeting. While no change in policy is expected, traders will be keen to see if the Fed’s outlook and assessment has shift at all, with special focus on forward guidance given the rise in domestic and global bond yields.

Silver

Silver prices have traded largely in line with gold over the last week with price recovering against recent losses to trade back up towards the 26 level. As with gold, the retreat in the US Dollar over recent sessions has helped lift silver. Meanwhile, the ongoing strength in equities is helping provide support also, keeping the near term outlook for silver mildly bullish. With traders looking ahead to the global re-openings which are anticipated across Q2, demand for silver is likely to increase which should keep price supported in the near term.

Technical Views

GOLD

The breakdown through the 1764.98 level saw price trading as low as 1680, where buyers stepped back in ahead of testing the 1669.42 support. In light of the sell off across recent months, the outlook remains geared towards further losses unless bulls can get back above the 1764.98 level in the near term.

SILVER

Silver prices found support into the test of the 2.0756 level with price bouncing up to retest the broken trend line from November lows. With the trend line acting as resistance for now, the bear term view is neutral. Any break below 25.0756, however, will open the way for a test of 22.5950 next.

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