Gold Technical Report: Gold prices had started giving bullish hints in the latter part of last week amidst the thin trading due to the festive season and have continued the bullish mood so far. It has already recorded an intraday high in the last 6 months and has strong support at 200 DMA at 1780. The rally may continue as it has overcome the important psychological 1800 mark. The Medium term support stands at 50 DMA @1754 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 84 and the Relative Strength Index is at 65.
Silver Technical Report: The silver prices, parallel with gold prices played rangebound with an upward bias last week. The medium-term trend looks up as the prices continue to trade above 200 DMA @21.10. As 50 DMA @21.96 has crossed above 200 DMA on daily charts, further fire-up in the rally is expected. The Short term Stochastics Oscillator is at 52 and the RSI momentum is near 61.
Fundamental Report: Gold prices spiked higher early Tuesday on new year buying, but gains were limited by a surge in the U.S. Dollar. The rally to its highest level since June 2022 was helped by a drop in Treasury yields. Nonetheless, the trade was a little cautious as investors assessed the prospects for more Federal Reserve interest rate hikes. The SPDR Gold Shares ETF (GLD) finished at $171.04, up $1.40 or +0.82%. Gold trader’s focus now shifts to Wednesday’s release of the minutes from the Fed’s Dec. 13-14 policy meeting. A dovish tone could spike prices higher.
Another important event draws closer which is Friday’s U.S. Non-Farm Payrolls report. Gold could spike higher if the Fed minutes reveal that central bank policymakers are considering slowing the pace of rate hikes and ending the hiking cycle at a lower peak rate than currently anticipated. Analysts feel, given the economic slowdown, the U.S. central bank won’t be as hawkish as in 2022. It could pivot and start to cut interest rates in 2023, especially since the American labor market is not as good as it seems at first glance.