Gold Technical Report: Gold played into narrow band yesterday and closed day with a DOJI signaling indecision in the market, on the back of a heightened volatility this week earlier when as it crossed above 2100 mark upside and also drifted down below 2050 at the close on the same day. The prices remained buoyant throughout last week continuing the trend of earlier week. It has maintained the support of 10 days Exponential Moving Average and had crossed above the 2000 mark convincingly. The short term Stochastics Oscillator is at 36 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 60 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices drifted downwards for fourth consecutive day. It has started decline on massive profit booking after it hit 25.88 intra day high on Monday. The prices are currently trading below and stuggling to reach 25.00 mark which may signal continuation of bullish trend. Currently its trading below 10 days Exponential Moving Average @ 24.17. If strength persists, it can try to reach May Highs of 26.00 mark as a new target. The Short term Stochastics Oscillator is at 19 and Relative Strength Index near 48.
Fundamental Report: U.S. dollar’s pullback did not provide material support to gold markets. Gold prices prefer to play steady within the $2,020 to $2,050 range, after an earlier spike to over $2,100. The market’s anticipation of potential U.S. Federal Reserve rate cuts was moderated by resilient U.S. economic indicators and a de-escalation of Middle East tensions. The high-impact Nonfarm Payrolls (NFP) data from the US will be published by the Bureau of Labor Statistics today. The labor market report is likely to show that the economy created 184K jobs last month, up from a job addition of 150K reported in October. The Unemployment Rate is set to remain unchanged at 3.9%. A closely-watched measure of wage inflation, Average Hourly Earnings, is expected to inch higher by 4.0% in the year through November, a tad down from October’s 4.1% increase. On a monthly basis, Average Hourly Earnings are forecast to rise 0.3% in the reported month, compared to a 0.2% increase in October. Market participants begin to look at Fed action next year, there is an 85.9% probability that the Fed will continue to maintain current rates with a 12.1% probability that they will cut rates by ¼%. The optimism that the Federal Reserve will begin to unwind the rate hikes that have occurred since March 2022 has been fueling the recent gains in gold. However, the uncertainty has created extreme volatility in which we have seen gold prices spike tremendously as witnessed by last Friday’s gains as well as Monday’s spike to a new record high and subsequent selloff.