GoldPrice.

Happy Friday, traders. Welcome to our weekly market wrap, where we look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to into the future. 
 
Gold prices are easing on Friday, in the sway of strong profit-taking and quarter end. Still, there are good reasons to have a positive view of gold in the near term. 
 

So, what kind of week has it been? 

 “Resilient” is a good word to describe how gold’s chart is looking as we roll into the weekend and bring Q1 2023 to a close, especially over the last three trading sessions. The cooling of March’s rippling worry about instability in the US banking system has been a strong undercurrent all week, and the uncertainty around how long the FOMC can or will continue hiking rates still casts a hawkish shadow across markets. Both have the potential to push strong headwinds against the yellow metal’s first-quarter rally. But, despite that, gold spot prices, gold’s trading chart is still moving towards the top-right corner. 

All this in a week with relatively little headline news of relevance to markets and practically nothing to talk about on the macroeconomic data calendar. Early on, it looked like the relative calm of a quiet week would be a vacuum to doom gold’s prospects with nothing to encourage support. The weekend headlines reporting that a buyer had been found for (most of) the remains of Silicon Valley Bank appeared to move us firmly into the closing act of this month’s banking crisis in miniature. Risk appetite roared higher on Monday morning, and equities rode a boost higher at what appeared to be the expense of both US Treasury yields, and gold prices. Gold spot eased through most of the morning before hitting steady support at $1950/oz. Seeing buyers step in at this high a level (relative to recent months) was the week’s first positive signal for the gold market. 

On Tuesday, the prior day’s equity rally deflated as the strongest impulse coming out of the stabilizing banking sector was an unwind of the pressure that had been dragging Treasury yields sharply lower since SVB’s bust. But even as a surging 10-year yield acted as an anchor around the next of US stocks, gold spot prices managed to rally back to nearly $1970 by midweek. From there, through to Monday morning, investors, traders, and money managers appear to have read gold’s rebound as a proof-of-concept (and/or value,) and despite the bidding price being much richer than three or six months back, the yellow metal had a steady flow of buyers that bid the spot chart back as high as $1980. 

Friday has been a half-step back for gold, but not one that was entirely unexpected. Markets seemed mostly non-reactive to the PCE Price Index data reported on Friday morning, although it may come to be of note later on that the “Fed’s preferred” metric for inflation in the US economy came in cooler than expected— despite those expectations largely being based on the CPI data investors had already digested for the same period. As the US session has traded and rolled to a close— this being the final business day of not only the week but the month and the financial quarter— we’re seeing steady pressure being applied by profit takers looking to lock in the bigger wins on Q1’s book of business. While this has played out as a rally in Treasury prices (with managers who were long rates closing off those positions), it has brought a heavier flow of gold selling before the close as traders try to lock in some benefit of this recent run towards $2000/oz. 

Next week’s trading may start out as more of the same, as the calendar is again fairly light. We’ll be looking for a busier wrap, however, as the first week of Q2 2023 will close with a vital piece of economic data in the form of the March Jobs Report. 
 
For now, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see everyone back here at the end of another week.