Gold Technical Report: Gold trades above the $1,800 mark, and the daily chart shows that the price crosses above a mildly bearish 200 Simple Moving Average (SMA) for the first time in five months. At the same time, a bullish 20 SMA keeps heading north below the current level and above the 100 SMA, reflecting positive momentum. Technical indicators, in the meantime, turned north, the Momentum bouncing from around its midline but the Relative Strength Index (RSI) extending its advance into overbought territory.
Silver Technical Report: The silver prices, parallel with gold prices showed upward move. The prices continue to trade above 200 DMA @ 21.28. If it will break 200 DMA then next major support is at 50 DMA @ 20.18, crossing below which may change the medium term trend into negative. the Momentum bouncing from around its midline but the Relative Strength Index (RSI) extending its advance into overbought territory.
Fundamental Report: The bright metal benefited from an extended US Dollar sell-off as United States macroeconomic figures fueled Powell’s triggered slump. On Wednesday, the Greenback fell on the back of a dovish message from US Federal Reserve (Fed) Chair Jerome Powell.
The US Dollar remained under pressure throughout the first half of the day, resuming its decline early in the American session. On the one hand, the Personal Consumption Expenditures (PCE) Price Index rose by 6% YoY in October, easing from 6.3% in the previous month. In addition, core PCE inflation came in at 5% in the same period, down from 5.2% in September. On the other, the ISM Manufacturing PMI fell to 49 in November, down from the previous 50.2, being the first time the indicator signals contraction since the early stages of the pandemic.
The events reflect the high risk of an economic setback after the US central bank aggressively hiked rates to tame inflation. Indeed, price pressures give signs of receding, although the risk of an economic downturn has increased. Nevertheless, investors are convinced the December Federal Reserve meeting will bring a 50-bps rate hike, while even smaller hikes will follow.
Forecasts suggest headline Nonfarm Payrolls (NFP) is likely to ease with a 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%. It should be noted that a likely easing in the Average Hourly Earnings for the stated month could also weigh on the gold price.