Bank Borrowings from FED Continues to Climb
To assist troubled banks, the Federal Reserve has historically offered credit through its seldom-used discount window. Additionally, in March, an emergency lending program was established after the failure of several regional banks caused renewed stress in the financial system.
In mid-March, total borrowing from the Federal Reserve peaked at $164.8 billion, significantly higher than the meagre $15 billion prior to the collapse of Silicon Valley Bank (SVB) and other institutions. Today borrowings total $93.6Billion down significantly from March, but still dangerously high compared to emergency borrowings before SVB.
Debt Ceiling woes seem to have alleviated slightly, with the Senate due to approve its increase today. This comes down to the wire, as the Treasury Department deadline is this coming Monday. While the decision to increase is said to have been finalised, we’re yet to see complete approval for this.
We’re also 2 weeks away from the next FED meeting to present another rate rise, or to pause. On the back of 10 consecutive rate rises it would be hard-pressed for the public to absorb yet another increase to their mortgage repayments without causing an outcry. Many homeowners are already at breaking point and are yet to have recent months' increases passed into their repayments completely.
Gold and Silver look to continue their recovery, with Gold currently at $1975 and Silver at $23.83 at the time of writing. Chart shapes on the 1 day, 200MDA and RSI look optimistic for Gold and Silver to continue their upward momentum in the coming weeks.
Gold daily chart, with 200MDA
Silver daily chart with 200MDA
Gold Technical Analysis
Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis returning to a STRONG BUY signal.
Technical indicators - Monthly Projections
RSI(14) | Buy |
STOCH(9,6) | Buy |
STOCHRSI(14) | Overbought |
MACD(12,26) | Buy |
ADX(14) | Neutral |
Williams %R | Overbought |
CCI(14) | Buy |
ATR(14) | Less Volatility |
Highs/Lows(14) | Buy |
Ultimate Oscillator | Buy |
MACD(12,26) | Buy |
ADX(14) | Neutral |
Williams %R | Overbought |
CCI(14) | Buy |
ATR(14) | Less Volatility |
Highs/Lows(14) | Buy |
Ultimate Oscillator | Buy |
ROC | Sell |
Bull/Bear Power(13) | Buy |
Summary for Monthly Forecast: Strong Buy
Disclaimer
This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.