Gold Technical Report: Gold prices moved up yesterday taking intra-day support at 10 Day Moving Average (DMA) @1978. Both 10 DMA and 50 DMA @1896 are trading over 200 DMA @1786 hence, the medium-term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 80 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 68 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver also following suit, zoomed up smartly and cleared the two-month high. It has strong support near the common area of 100 DMA @22.61 and 50 DMA @22.24. The medium-term trend looks bullish as both of these averages are above 200 DMA @21.00. The Short term Stochastics Oscillator is at 92 and Relative Strength Index is near 77.
Fundamental Report: Dollar weakness contributed roughly 25% of the gains in gold but it was market participants actively bidding the precious yellow metal higher that caused this current rally to accelerate. The dollar is currently down 0.53% and the dollar index is fixed at 101.25. The primary fundamental event that propelled gold well above $2000 was weaker U.S. economic data. This data suggests that the Federal Reserve could certainly consider slower rate hikes and a pause of rate hikes sooner. For the first time since May 2021, available new job positions have dropped below 10 million. CNBC reported that “Job openings fell below 10 million in February for the first time in nearly two years, in a sign that the Federal Reserve’s efforts to slow the labor market may be having some impact. Available positions totaled 9.93 million, a drop of 632,000 from January’s downwardly revised number, the Labor Department reported Tuesday in its monthly Job Openings and Labor Turnover Survey.” As the Federal Reserve has been laser-focused on the extremely robust labor market as it uses its tools to reduce inflation today’s report confirms that recent action by the Federal Reserve is beginning to have an impact as seen in the contraction of job openings. The probability that the Federal Reserve will not raise rates at the May FOMC meeting has increased dramatically. According to the CME’s FedWatch tool, there is a 58.7% probability that the Federal Reserve will leave its terminal rates of 4.75% to 5% and begin a period of pausing rate hikes. However, there remains a 41.3% probability that the Fed will raise rates by ¼% in May.