Market Trends and Cryptocurrency Influence

One significant factor in silver’s divergence is the burgeoning cryptocurrency market. As investors seek digital assets for high returns, traditional havens like silver are losing their appeal. The allure of cryptocurrencies, offering potential for significant gains, has shifted investor focus away from metals.

Stock Market Impact

Parallel to the cryptocurrency surge, the stock market’s resilience and attractiveness have further dampened silver’s appeal. Investors are drawn to the higher liquidity and returns in the stock market, seeing it as a more lucrative option compared to silver investments.

Industrial Demand and Economic Conditions

Despite its status as a precious metal, silver’s industrial uses cannot be overlooked. Economic conditions, including industrial growth or contraction, play a crucial role in determining its demand and price. With the current economic scenario favoring technological and energy sectors where silver is less utilized, its industrial demand is not bolstering its value as it might in different conditions.

Market Forecast

Considering the current trends and market conditions, a short-term forecast leans towards a bearish outlook for silver. The combined effect of growing interest in cryptocurrencies, a strong stock market, and subdued industrial demand creates a challenging environment for silver to match the performance of gold or to gain significant momentum in the near term.

Investors in silver need to be aware of these diverging factors and might need to adjust their strategies accordingly, keeping an eye on market trends and emerging investment avenues like digital assets.

Technical Analysis

JPMorgan Warns Bitcoin Still Overvalued Despite Recent Decline

JPMorgan’s latest analysis reveals that Bitcoin remains overbought, despite its recent price drop. The bank predicts continued selling pressure as the halving event nears, citing overoptimistic positioning. Metrics like futures positions and bitcoin futures’ premium over spot prices support this view. The report also highlights a decrease in spot Bitcoin ETF inflows, challenging earlier predictions of a year-end rally. The analysis comes amid CEO Jamie Dimon’s ongoing skepticism about Bitcoin, contrasting with the market’s previous high expectations for post-halving gains. (Bitcoin.com)

Dollar Holds Firm, Yen Near Decade Low Amid Currency Intervention Threat

The dollar remains strong against a backdrop of global rate shifts, with the yen struggling near a 32-year low despite Japan’s potential intervention. Japanese authorities warn the yen’s weakness doesn’t match economic fundamentals, hinting at possible action to support it. Meanwhile, expectations that the Fed will maintain higher rates contrast with potential ECB and BoE cuts, pressuring the euro and sterling. The dollar index saw a modest rise, as central banks globally navigate divergent monetary policies amid fluctuating economic data. (Reuters)

Oil Edges Up Amid Supply Woes, Gold Climbs on Rate Cut Hopes

Oil prices recorded a slight rise at the start of the week, driven by intensifying geopolitical tensions and a decrease in the U.S. oil rig count, hinting at potential supply constraints. Concurrently, gold prices experienced an increase, buoyed by the prospects of upcoming Federal Reserve rate cuts and a softer dollar. These movements reflect the market’s response to unfolding international events and central bank policy speculations, influencing both commodities’ trajectories in global markets.

The Shiba Inu community is celebrating a significant achievement as Shibarium, the Layer-2 scaling solution for the Shiba Inu ecosystem, has reached a new integration milestone. The platform has successfully processed over 412 million transactions, a testament to its growing adoption and functionality.

BlueBit, a Dubai and Saint Vincent-based centralized exchange, has announced an exciting collaboration with the SHIB community, a partnership that it believes will bring the SHIB and Sparrows communities closer and lead to even greater achievements together.

As part of this move, BlueBit has successfully integrated Shibarium, which would provide BlueBit users with access to a broader array of digital assets and cutting-edge blockchain solutions.

The integration of Shibarium with major cryptocurrency exchanges is also expected to play a pivotal role in increasing its visibility and usability, attracting a broader audience of users and investors.

The latest integration of Shibarium has sparked a wave of excitement in the wider crypto community. The Shiba Inu official X handle has responded with enthusiasm to this milestone, which reflects the platform’s potential for future growth.

Shibarium’s astounding growth

Shibarium has quickly gained traction since its late August 2023 launch, surpassing 3.8 million in total blocks and a whopping 412 million in total transactions.

According to the Shibariumscan explorer, the total transactions for Shibarium are 412,407,305. Total blocks have reached 3,825,223 and wallet addresses are at 1,383,613. However, Shibarium is reporting declines in its daily transaction count, which fell to 6,700.

In response to the increased activity and the inherent security risks associated with rapid growth, the Shiba Inu development team has taken proactive steps to safeguard the platform. Shiba Inu would be incorporating Fully Homomorphic Encryption (FHE) into its framework, thereby offering greater data privacy and security. Furthermore, an approach that includes self-sovereign identity (SSI) provides users with complete control over their data.

The pair is flat on the day now at 151.42 as it continues to hang near multi-year highs since last week. The 2022 and 2023 highs of 151.90-94 is the key resistance region in play at the moment for USD/JPY. Hold below and sellers can look to build off that ceiling to push price back lower. But break above and the sky is the limit for the pair as there is little technical resistance left until above 160.

As such, the only thing that can rein in any USD/JPY breakout from here is intervention by Tokyo. And the warnings are growing louder in the last few days. Earlier today, Japan’s top currency diplomat Kanda was rather vocal about the situation. He said that the yen’s weakness did not reflect fundamentals and warned against the recent “big slide”.

Kanda noted that the latest yen moves were “speculative”, adding that “I feel something strange about it”.

That’s a suggestion that Tokyo could look to get more involved if the one-sided move continues. And it comes despite the BOJ putting an end to negative rates and scrapping its yield curve control policy last week.

Looking at the situation, I reckon Tokyo won’t look to intervene so long as the technical ceiling above holds. A break higher will tilt the balance of risks for the yen, which could lead to a much sharper decline in the currency next. As such, the potential lines for USD/JPY intervention look to be closer towards 154 to 155 in my view.

For now, the bond market will remain a key spot to pay attention to. 10-year Treasury yields are at 4.225% and so long as they stay underpinned, chances are USD/JPY will follow as well.

As we turn our attention forward, we’re faced with a holiday-shortened trading week, with markets in the US, UK, and Europe closed for Good Friday. However, there is still likely to be plenty of market-moving news, including US Treasury auctions, GDP reports, and the all-important personal consumption expenditure (PCE) inflation report, the US Federal Reserve’s preferred inflation gauge.

Treasury auctions

Monday 25 March: These auctions are often key events, as the results can affect the direction of interest rates, currencies and equities. Watch for the bid-to-cover ratio, indirect acceptance rates, and high yield rates. Auctions that go well could push rates lower and, as a result, weaken the US dollar and boost stocks. Auctions that go poorly are likely to push rates higher, strengthen the dollar, and push shares lower.

Treasury auctions all take place at 9am (UK time) and start on Monday with the 2-year Treasury note, followed by the 5-year note on Tuesday, and the 7-year note on Wednesday. The 5-year Treasury rates remain at levels of resistance around 4.35%; a weak auction could be what finally causes the 5-year rate to break out and push higher, perhaps to as high as 4.5%. Conversely, a strong auction could result in a retreat to 4%.

US & UK GDP

Thursday 28 March: The US and UK release fourth-quarter GDP revisions on Thursday. In the US, GDP is expected to remain unchanged at 3.2%. These numbers aren’t likely to affect markets too much, unless there is a significant revision. The core PCE price index part of the GDP release, however, could warrant more attention. The latest revision showed core PCE rose by 2.1% quarter on quarter (q/q). An upward revision could suggest that inflation is not declining as quickly as the Fed anticipates, which could impact rates more at the front end of the yield curve and, as a result, lead to the US dollar strengthening.

The last GDP release showed that the UK economy contracted by 0.3% q/q and 0.2% y/y. Downward revisions could further weaken the pound, pushing the market to anticipate rate cuts sooner. The pound was severely affected following the Bank of England’s rate decision last Thursday, and GBP/USD appears to be heading towards support at 1.263. A breach of support could lead to a further drop to 1.25.

US PCE

Friday 29 March: The PCE report is scheduled for release on Friday morning, when US and UK markets are closed, which presents a challenging situation for traders, since the markets won’t reopen until Monday. The PCE index is anticipated to rise by 0.4% m/m, up from 0.3%, and 2.5% y/y, up from 2.4%. Meanwhile, core PCE is expected to increase by 0.3% m/m down from 0.4%, and remain steady at 2.8% y/y.

This scenario could lead to anxiety among traders and increased hedging activity, observable in metrics like the VIX volatility indexes. Typically, a rise in implied volatility signals heightened put option buying or hedging, potentially exerting downward pressure on equities heading into the extended weekend. Conversely, a cooler-than-expected PCE number might boost stocks when US trading resumes, as implied volatility levels decline.

A similar situation occurred following the CPI report, when the VIX 1-day soared to high levels the day before the report was released. Despite a hotter-than-expected CPI print, the S&P 500 rallied as implied volatility quickly subsided. This pattern could potentially repeat following the PCE report, suggesting that stocks may rally if implied volatility spikes after the data is released.

Key economic and company events
Here’s our rundown of notable economic announcements and company reports scheduled for the coming week:

Monday 25 March

US Chicago Fed national activity index (Feb), new home sales (Feb)
Australia Westpac consumer confidence (Mar)
Results: BuzzFeed (Q4), Kingfisher (FY), Rekor Systems (Q4)

Tuesday 26 March

US durable goods (Feb), Cash-Shiller home price index (Jan), consumer confidence index (Mar), 2-year Treasury note auction
Results: Bellway (HY), John Wood Group (FY), Fevertree Drinks (FY), Flutter Entertainment (FY), GameStop (Q4), McCormick & Co (Q1), Ocado (Q1), Smiths Group (HY)

Wednesday 27 March

Australia consumer price index (Feb)
UK Nationwide house prices (Mar)
Eurozone business climate (Mar), consumer confidence (Mar)
US EIA weekly crude oil stocks change
Results: Carnival corp (Q1), Cintas (Q3), Paychex

Thursday 28 March

Australia retail sales (Feb)
UK current account, final GDP (Q4)
US final GDP (Q4)
Results: Walgreens Boots Alliance (Q2)

Friday 29 March

US PCE core price index (Feb), personal spending (Feb), trade balance (Feb)
UK and US markets closed for Good Friday
Results: No major announcements scheduled
Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

Index dividend schedule

Dividend payments from an index’s constituent shares can affect your trading account. View this week’s index dividend schedule

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