Gold Technical Report: Yesterday, Gold not only bounced back from the intra day low near 100 DMA @ 1940 but also managed to give a close above 10 DMA @ 1955. Both these levels can act as a support now. Next major resistance stands at 50 DMA @ 1990. 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 45 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices declined initially in the day but rebounded from a support at 100 DMA @ 23.32 and also closed above the same for fourth consecutive day. If these levels are sustained , next target stands at 50 DMA @ 24.44. The medium term trend looks intact as both of these averages above 200 DMA @ 22.09. The Short term Stochastics Oscillator is at 72 and Relative Strength Index near 45.
Fundamental Report: Yesterday, the business activity in the US service sector continued to expand, albeit at a more moderate pace than in April, with the ISM Services PMI declining to 50.3 in May from 51.9 in April. This reading came in below the market expectation of 51.5. Further details of the publication revealed that the Prices Paid Index edged lower to 56.2 from 59.6 and the Employment Index dropped to 49.2 from 50.8. Commenting on the data, “there has been a pullback in the rate of growth for the services sector. This is due mostly to the decrease in employment and continued improvements in delivery times (resulting in a decrease in the Supplier Deliveries Index) and capacity, which are in many ways a product of sluggish demand,” said Anthony Nieves, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee.” The US Dollar lost its strength after this report and the US Dollar Index turned negative on the day slightly below 104.00 with the initial reaction. This boosted the Gold demand and other assets. 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.