Gold Technical Report: On Friday, Gold succumbed to selling pressure near 50 DMA @1989 and declined to give a close below 10 DMA @1954. Next major support stands at 200 DMA @1836 (below which the trend may turn bearish ) Gold has been facing selling pressure on continuous profit booking after it made a new high around 2080 last month. The short term Stochastics Oscillator is at 60 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 40 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also declined following the suit but found a support at 100 DMA @23.36 for third consecutive day, albeit after a struggle of earlier 3 trading sessions. If these levels are sustained, the next target stands at 50 DMA @24.43. The medium term trend looks intact as both of these averages above 200 DMA @22.07. The Short term Stochastics Oscillator is at 80 and Relative Strength Index near 44.
Fundamental Report: Gold prices fell sharply on Friday after the BLS (Bureau of Labor Statistics) revealed that 339,000 new nonfarm payroll jobs were added last month, well above Wall Street estimates that predicted an increase in May of 190,000 new jobs. The report also showed that the unemployment rate rose from a 53-year low of 3.4% in April to 3.7% last month. This created a strong bullish updraft in Treasury yields and the dollar resulting in a downdraft in dollar-priced bullion. However, it was selling pressure that was the strongest component in today’s price decline of both gold and silver. Earlier, data published by Automatic Data Processing (ADP) showed on Thursday that private sector employment in the US rose by 278,000 in May. This reading surpassed the market expectation of 170,000 by a wide margin. The 296,000 increase recorded in April got revised lower to 291,000. These better-than-expected jobs data have lowered the probability that the Federal Reserve will begin a rate hike pause this month, the probability of a pause is still remarkably high. The CME’s FedWatch tool predicts that there is a 73.6% probability of a rate hike pause down from 79.6% yesterday. The modell estimated a 35.8% probability of a pause a week ago. Last week, the U.S. Senate successfully passed a bipartisan bill, supported by President Joe Biden, to raise the government’s debt ceiling, avoiding a historic default that could have occurred for the first time ever. Investors are now next awaiting the Federal Open Market Committee’s (FOMC) decision-making in the upcoming week.