Gold Technical Report: Gold tried to stabilize a bit after the sharp fall on the previous 2 trading days but still trading below 10 DMA. Till the 50DMA @1848 is trading over 200 DMA @1775, the medium-term trend looks upwards. The long-term support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 16 and Relative Strength Index is at 46.
Silver Technical Report: The silver prices, too traded sideways after facing a downfall on the previous 2 trading days and closed below support near 50 DMA @23.34. The medium-term trend looks up as the prices continue to trade above 100 DMA @21.64. As 50 DMA trades above 200 DMA @20.97 on daily charts, gives an indication of Buy on Dip. The Short term Stochastics Oscillator is at 15 and the RSI momentum is near 37.
Fundamental Report: The precious metal is attempting to nurse deep wounds inflicted by January’s blockbuster NFP report which aggressively fuelled expectations around more US rate hikes from the Federal Reserve. Last month, the US economy created a whooping 517k jobs – the most since July and easily bearing market forecasts of 185k. Meanwhile, unemployment fell to its lowest level since 1969 at 3.4%. Given how the stunningly good report is likely to energize dollar bulls and empower Fed hawks, the path of least resistance for gold may point south in the short to medium term. It will be wise to keep a close eye on the developments revolving around Sino-U.S. relations. Market sentiment remains gripped by fears over worsening US-China relations after the US shot down a suspected Chinese spy balloon over the weekend. Should tensions escalate, this may promote risk aversion boosting appetite for safe-haven assets. Appetite towards gold could receive a boost, however, this may be capped by an appreciating dollar. We may find little volatility ahead of the speech by Federal Reserve (Fed) chair Jerome Powell. The return generated by 10-year US Treasury bonds has scaled to nearly 3.65% with sheer pace. For further guidance, the commentary from Fed’s Powell about the roadmap of taming stubborn inflation and fresh concerns about inflation projections due to a rebound in labor market conditions will be keenly watched. Meanwhile, U.S. Treasury Secretary Janet Yellen said on Monday the United States may avoid a recession as inflation is coming down while the labor market remains strong, as reported by Reuters.