Gold Technical Report: Gold declined further on the first trading day of the new year but closed holding support near 10 days Exponential Moving Average strongly. Earlier it had struggled and come out of upper range maintained by the market for earlier few sessions,. Recently it witnessed volatile movements when it crossed above 2100 mark upside on 4th Dec and also drifted down below 1980 on 12th Dec. The short term Stochastics Oscillator is at 68 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 60 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices declined for fourth straight trading session, again closing below the support of 10 days Exponential Moving Average after holding it for last 2 weeks. Earlier in December, it displayed robust upmove as it forcefully crossed above all 50,100 and 200 days Exponential Moving Average on closing basis in a single day. It has started decline earlier on massive profit booking after it hit 25.88 intra day high which now becomes the next target if rally sustains. The Short term Stochastics Oscillator is at 28 and Relative Strength Index near 46.
Fundamental Report: The markets are primarily driven by expectations of Federal Reserve rate cuts in 2024. Investors are closely monitoring upcoming economic data for further insights into the U.S. rate trajectory. The gold prices have seen remarkable ups and downs throught the year and as 2024 begins. Fed rate cuts weaken the dollar, enhancing gold’s appeal to foreign investors, while escalating Middle East tensions boost its safe-haven allure. The dollar stability enables traders to evaluate the likelihood of significant interest rate reductions by the Federal Reserve. The dollar index uptick can, reflect a shift in market sentiment towards potential rate cuts. Traders are now heavily anticipating a Fed move, with the CME FedWatch tool indicating an 86% probability of rate cuts starting from March. The Federal Reserve’s unexpectedly dovish stance in its December policy meeting, forecasting a 75 basis point reduction in 2024, contrasts with the stances of other central banks like the ECB and BoE. Fed meeting minutes and economic reports on job openings and nonfarm payrolls are expected to provide crucial insights into the central bank’s rate decision process. Geopolitical tensions in the Middle East, particularly the recent naval clash involving U.S. forces and Iran-backed militants in the Red Sea, have heightened market concerns. These events are contributing to gold’s appeal as a safe-haven asset amidst escalating risks of a broader regional conflict.