Weekly Gold Technical Analysis

17 March 2023

Last week we perfectly picked the storm that saw the US500 and ASX200 plummet. This week sees markets still in recovery amidst multiple US bank failures and notices of weakness from other banks worldwide.

We also saw additional data coming from the US, with mixed results. PPI (Producers Price Index) has started declining, and quickly. If following through to consumers, this should see CPI decline in the coming months as well.

The Empire State Manufacturing Index, which provides a gauge of manufacturing activity in the States measured a -24.6 from an estimated -7.8. Joining a lowering PPI to a negative manufacturing index makes complete sense. Manufacturing businesses are stagnating.

While manufacturing struggles, building permits and housing starts increasing in February either showing signs of recovery or frustrated people have waited long enough and are simply committing to more housing construction and debt with no other options available. “Currently the US has a shortfall of approximately 6.5 million single-family homes due to a decade of underbuilding” (Realtor.com).

Today we’re awaiting US news around consumer sentiment and the US leading economic index. These two items will be telling in how consumers are really feeling. A stable print on these could provoke the FED to consider more interest rate rises while a poor print could let the FED loosen its current aggressive stance on rates.

Meanwhile, Gold and Silver continue to outperform. As share markets quickly shot to oversold through a lack of confidence, money clearly flowed directly to risk-off assets like gold and silver. Bullion pricing has since settled, quietly waiting for additional poor economic news to continue its next leg upwards.

And Australia specifically - our dollar continues to hover around US66c, under its 200MDA. A lower AUD adds to the delight of increased gold and silver pricing.

Time and time again, we see bullion providing great protection against currency devaluation and share market risk. We’ve included this week’s US market information below.

Gold Technical Analysis 

Gold just moved to a STRONG BUY recommendation for both moving averages and technical indicators over a weekly basis.

Every single indicator and moving average (bar STOCH 9,6) returned this very positive outlook for Gold.

We’ve included a Daily chart, showing Gold, its 200MDA and RSI. Keep a close eye on the RSI as it tips over 70 and into overbought territory.