Gold Technical Report: Gold prices zoomed up yesterday and finally closed above the 10 Day Moving Average (DMA) @1995 for the first time in the last 12 trading sessions. Both 10 DMA and 50 DMA @1943 are trading above 200 DMA @1810 hence, the medium-term trend looks upwards. The primary support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 55 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 58 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also following suit, registered a breakthrough from the parallel channel of the last 2 weeks. It has strong support near the common area around 23.25 where 100 DMA and 50 DMA are meeting. The medium-term trend looks bullish as both of these averages are above 200 DMA @21.60. The Short term Stochastics Oscillator is at 49 and Relative Strength Index is near 62.
Fundamental Report: With the FOMC meeting to conclude today, the Federal Reserve will most likely announce a ¼% rate hike and attention has shifted away from the Fed as market participants focus on other potential calamities within the financial markets. Genuine angst regarding the debt ceiling and concern about the re-emergence of the banking crisis has weighed heavily on the minds of market participants. These concerns are so significant that for the first time, the CME’s FedWatch tool is indicating that there is a 15% probability that the Federal Reserve will cut rates at the June FOMC meeting. The CME’s FedWatch tool predicts that there is an 85% probability that the Fed will pause rate hikes in June. If so, this would be the first time the Federal Reserve has either not raised rates, or cut rates over the last 10 consecutive FOMC meetings. Monday the First Republic officially became the fifth major bank to collapse within two months. Global banking fears were reignited again last week after several major financial institutions including First Republic, Bank of America, Barclays, Lloyds, and Santander raised fresh alarm bells after reporting significantly worse-than-expected deposit outflows. The U.S. regulators seized control of First Republic Bank and sold it to JPMorgan Chase – marking the failure of a fifth major bank within two months – following on from the collapse of Silvergate Capital, Silicon Valley Bank, Signature Bank, and Credit Suisse. Economists are convinced that this is just the tip of the iceberg. Conclusive evidence shows the global banking crisis was fuelled as a direct consequence of soaring interest rates – and the turmoil is far from over.