Despite a lack of momentum in recent weeks, gold (and silver) is holding steady, and building new support levels as markets wait for a fresh spark in either direction.

After hitting a low of $1,984.71 almost two weeks ago, gold has recovered and settled comfortably back above $2,000 per ounce. Gold is currently trading at $2,035, up 2.5% from the aforementioned low, and has spent most of the past three months above $2,000 per ounce – a record stint at this key level.

270224 USD Chart

Silver as always has proven to be more erratic, with some large swings up and down. On the same day gold slipped to $1,984, silver fell to $21.95, but has also recovered, currently sitting at $22.63 for a gain of 3%. $22.50 appears to be the main support level for silver at the moment, usually recovering quickly whenever it drop below this level.

Precious metal markets have been quiet of late, with bears unable to push gold back below $2,000, while bulls lack the momentum to get gold rallying once more. Instead, markets have been focused on other assets like stocks or Bitcoin.

US stock markets have seen record highs of late. This comes despite a fairly bleak picture of struggling growth due to high interest rates. Instead, the ‘magnificent seven’ - Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla – continue to prop up the stock markets. Nvidia in particular has seen huge growth on the back of their AI tech advancements. If the magnificent seven bubble should pop, as seems inevitable at some point, then it could cause a severe sell-off in stocks resulting in a crash that would likely exceed that of the financial crisis almost twenty years ago.

Looking ahead, March will hold some potential for gold and silver, but could prove another quiet month. Next week will see the UK Budget revealed by Chancellor Jeremy Hunt. With a General Election due to be announced any time now, the Conservatives could be tempted to woo voters with some tax cuts. Although Hunt is expected to be more fiscally careful than former Chancellor Kwasi Kwarteng, unfunded tax cuts could see a repeat of the 2022 mini-budget chaos, and some currency volatility that would affect gold and silver.

March will also see the next batch of interest rate decisions from the Fed and BoE. Forecasts don’t expect any cuts to come in March however, so this is unlikely to have much impact on gold and silver. May will be the more likely time for an initial cut, and some gains for gold and silver as a result. With the UK entering a technical recession however, the BoE will be under more pressure to begin cutting next month. If the BoE decouple from the Fed and begin cutting then Sterling will fall against the Dollar, and gold will rise domestically as a result.

If March does prove uneventful fiscally, there is still plenty of potential for a rally to come out of nowhere. Geopolitical or unexpected economic events have dominated the past few years, so even a ‘quiet market’ could quickly turn.