Weekly Gold Price Technical Analysis: Bank stress lingering as FED borrowing increases (again).

The Federal Reserve has taken measures to provide lending support to banks that have faced deposit runs following the failure of several regional institutions earlier this year. While these efforts aim to restore stability to the financial system and alleviate the pressure faced by affected banks, the fact that the amount of debt being issued is now constantly increasing by billions of dollars every week is a very real concern.

The amount of money banks borrowed from the Federal Reserve has risen for the sixth consecutive week, surpassing the $100 billion mark for the first time in two months. This persistent borrowing pattern suggests that there is ongoing stress within the U.S. financial system.

Rumours abound that the FED is also looking to increase rates yet again in late June. Strong sticky inflation and continued job growth are giving FED chair Powell all the excuses he needs to charge in with the only defence against inflation he has - ‘Raise the rates’.

Another interesting conversation this week, from Australian data. 25% of all house sales recently reported, were bought with cash. With none of these home purchases requiring a mortgage, it’s reasonably safe to assume that cost of living increases aren’t really affecting these people. With interest rate rises very clearly affecting mortgage holders across all demographics, outright owners of homes could well be part of the reason that inflation continues to be ‘sticky’. Earlier this week, we reported that 40% of mortgage holders in

Australia experienced mortgage repayment stress with their last monthly payment. That’s one in every two and a half families and people are now genuinely concerned they may not be able to make the next repayment. And with the latest rate rise earlier this week due to hit balance sheets next month, the number of stressed mortgage holders is only set to increase.

Today we’re looking closer at bigger charts for Gold, to get a macro sense of the long and slow (and sometimes predictable) movement of this precious metal.

Look closely at the RSI for both daily and monthly.

Gold daily chart, with 200MDA

Gold weekly chart, with 200MWA

Gold Technical Analysis

Gold monthly analysis continues to recommend a STRONG BUY with weekly analysis returning to a STRONG BUY signal.

 Technical indicators - Monthly Projections

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.