Gold Technical Report: Gold prices declined yesterday for fourt straight day and posted below the major averages. The prices slipped from the intra day high and came below the conjunction point of 50 days EMA and 100 days EMA near 1933. It further declined breaking the 10 days Exponential Moving Average @ 1929. Next support stands at 200 days EMA @ 1908 whereas resistance lies near 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 67 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 50 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices continued the decline on fifth straight day and breached down major averages. It started above 10 days EMA @ 23.92 and then breached 50 days EMA @ 23.75 and then also 100 days EMA @ 23.65. Last week it made a the brief intraday high above the psychological mark of 25.00 but it could not hold ground. The 200 days EMA@ 23.23 will act as a major support now. The Short term Stochastics Oscillator is at 48 and Relative Strength Index near 46.
Fundamental Report : Not sprouting from within the U.S. but rather overseas, deep concerns regarding the economic slowdown in China and the eurozone have resulted in a sizable jump in yields of global bonds. Higher yields strengthened the dollar which in turn moved both gold and silver pricing lower. This is because the precious metals are paired against the dollar. Data suggest that both the eurozone and China have entered a period of economic contraction that is evident in the latest data. According to Reuters, “China’s services activity expanded at the slowest pace in eight months in August, a private-sector survey showed on Tuesday, as weak demand continued to dog the world’s second-largest economy and stimulus failed to meaningfully revive consumption.” Reuters also reported about economic concerns in the eurozone saying, “The decline in eurozone business activity accelerated faster than initially thought last month as the bloc’s dominant services. Fundamental support for gold is evident in recent statements by a prominent member of the Fed, Federal Reserve Governor Christopher Waller. Waller has been one of the more hawkish Fed members and is now suggesting a much more accommodative tone. In a recent interview, it is evident that he has softened his resolve regarding upcoming rate hikes. In an interview that aired today on CNBC, he said, “There is nothing that is saying we need to do anything imminent, anytime soon, so we can just sit there [and] wait for the data.” According to the CME’s FedWatch tool, there is a 93% probability that the Federal Reserve will not initiate a rate hike at the next FOMC meeting set to be held on September 20.