Both gold and silver have issued bearish engulfing signals on the monthly chart. Heraeus has indicated that the bull market for precious metals may face a consolidation period lasting several months.
Precious metals analysts at Heraeus noted that both gold and silver sent worrying bearish signals in March, suggesting that the recovery of the precious metals bull market may still take six months. Meanwhile, despite reports of sovereign sales and gold swaps, central banks overall remain net buyers of gold.
Analysts stated in their latest report that the Federal Reserve is in a difficult position regarding its interest rate policy.
They wrote: “With prices expected to continue rising while employment stagnates, the Federal Reserve will have to strike a balance between its dual mandates of supporting maximum employment and stabilizing prices. Even if a ceasefire is achieved in the Middle East, inflation may remain elevated for some time, indicating that the Fed should maintain or even raise interest rates. Nonfarm payrolls increased by 178,000 in March, surpassing expectations by 118,000. However, over the past 12 reporting months since January 2025, data for 11 months were revised downward, with an average revision of -51,000.”
They added: “Since the economic recovery post-COVID-19, total nonfarm employment has remained relatively stagnant since the end of 2024. If rising costs lead to slower economic growth, this will negatively impact employment. A weak labor market could prompt the Federal Reserve to lower the federal funds rate to stimulate the economy and employment.”
Analysts pointed out that the probability of one to two interest rate cuts in 2026 rose to 27.3% on April 9, up from 14.1% on April 7 before the ceasefire was announced.
Analysts also noted that central banks overall remain net buyers of gold, with net purchases reaching 27 tons in February, up from 5 tons in January.
They wrote: “Poland’s central bank added 20.2 tons of gold reserves in February, marking the largest monthly increase since February 2025 (29 tons). Uzbekistan (7.8 tons) and Kazakhstan (7.7 tons) also increased their reserves in February. The main sellers were Turkey (-8.1 tons) and Russia (-6.2 tons). This continues the trend of central banks steadily accumulating gold that has persisted since the global financial crisis. Last year, central banks collectively added 863 tons of gold reserves.”
Regarding price movements, Heraeus stated that gold sent a bearish signal last month.
They noted: “The monthly candlestick chart formed a bearish engulfing pattern, with prices opening higher in March than the previous month but closing lower. This coincided with the stalling of the bull market at the end of January and the start of U.S. and Israeli military actions against Iran.”
Analysts stated that the last occurrence of a bearish engulfing pattern was in April 2022, after which gold prices fell from $2,000 per ounce to $1,600, marking six consecutive months of decline. They wrote: “Despite this price movement, the current correction may be absorbed by the ongoing bull market, as rising inflation and falling real interest rates will support demand. However, if the upward trend of the past week reverses, the next price support level may be near the March low, around $4,100 per ounce.”
Turning to silver, analysts at Heraeus noted that sales of silver bars and coins retreated last month.
They wrote: “Perth Mint’s sales of silver bars and coins in March amounted to 976,450 ounces, sharply down from nearly 2 million ounces in February, which was the largest monthly sales volume in more than two years. Investors took advantage of the steep sell-off through early February to increase their positions. Total sales for the first quarter exceeded 4.6 million ounces, marking a much stronger start to 2026 compared to 2025.”
Sales of the U.S. Mint’s American Eagle silver coins also declined from 1.7 million ounces in February to 1.6 million ounces in March, but this figure remains ‘still considerable.’ They stated: “Total sales for the first three months exceeded 8.1 million ounces, compared to 5.3 million ounces during the same period last year, despite 2025’s annual total being the lowest since 2007.”
In terms of price movements, analysts observed a bearish engulfing candlestick pattern on the monthly chart, similar to that seen in gold. They said: “The opening price in March was higher than February’s closing price, but prices subsequently fell, resulting in March’s closing price being lower than the price at the beginning of February. Given that this pattern appeared on the monthly chart, its implication is that several months of consolidation along with sideways to downward price movements may occur before an eventual bull market recovery.”
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