Gold Technical Report: After the massive fall earlier, last week gold prices recorderd a green candle everyday suggesting buoyancy in the market. However as long as they trade below the main level of $1680, the medium term trend remains down. We may expect some pullback towards 200 DMA on weekly charts.On the upside, the next major resistance will be above 50 DMA @ 1727. The Short term Stochastics Oscillator is at 78 and RSI momentum is 43.
Silver Technical Report: After the massive fall earlier, last week, silver prices seem to retrace back.The prices are currently hovering around 50 DMA. However if the prices break earlier bottom of 18.25, next major support is only at 17.60 and crossing of which may change the medium term trend into negative. On upside, crossing of 200 DMA at 21.91 will change the main trend to positive. The Short term Stochastics Oscillator is at 72 and RSI momentum near 54.
Fundamental Report: Last week, the Gold moved up sharply above the $1650 level as the U.S. dollar retraced from the recent highs around 114.The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is trying to find support near 112. The yield of 10-year Treasuries have made a journey from 2.50% to 4.00% in last two months. The strong rebound in Treasury yields indicates that bond traders remain nervous. A combination of stronger dollar and higher yields may put significant pressure on gold markets, which remain in a strong downside trend. Traders will certainly stay focused on these key catalysts in the upcoming trading sessions. If the U.S. dollar moves back to multi-year highs, gold and other precious metals will find themselves under significant pressure. Traders should note that there is no demand for gold as a safe-haven asset right now as all the safe-haven money goes into the U.S. dollar. The Federal Reserve will convene its Open Market Committee meeting two more times this year. First on November 2, and then the final FOMC meeting of the year in December. Currently, the Federal Reserve is on record wanting to end the year with its Fed funds rate somewhere between 4% and 4 ½%. Currently, the Federal Reserve has set its prime interest rate between 3% and 3 ¼%. According to the CME’s FedWatch tool, there is a 57.7% probability that the Federal Reserve will raise rates to between 3 ¾% to 4% during their November FOMC meeting. This probability indicator is also predicting a 42.3% probability that the Fed will take interest rates to between 3 ½% to 3 ¾%. As for the December 14, 2022, FOMC meeting the CME’s FedWatch tool is predicting that Fed funds rates have a 57.6% probability of reaching 4¼% to 4 ½% and a 42.2% probability that interest rates will be set at 4% to 4 ¼% by the end of 2022. As the Federal Reserve acts by aggressively raising rates yields on U.S. debt instruments to rise as well. Higher yields in U.S. Treasuries take the U.S. dollar higher which in turn pressures gold to lower pricing.