Gold Technical Report: Gold traded in a narrow range on Friday closing with a DOJI signaling indecision, for second straight session. It has been on a decline mode since beginning of the new year and closed below support of 10 days Exponential Moving Average for fourth consecutive day, in last 15 trading sessions. Earlier it had struggled and come out of upper range maintained by the market for earlier few sessions looking poised to touch 2100 again. Recently it witnessed volatile movements when it crossed above 2100 mark upside on 4th Dec and also drifted down below 1980 on 12th Dec. The short term Stochastics Oscillator is at 28 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 48 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices moved upwards on Friday, after remaining depressed for the entire week and touched 200 days EMA on intra day basis before fizzling down on profit booking at closing. On Wednesday it had breached the support of 10 days Exponential Moving Average and fell further forcefully crossing below all 50,100 and 200 days Exponential Moving Averages on closing basis in a single day. Thus it It has fully reversed the upmove of 13th Dec when it had crossed above all these averages to later hit 25.88 intra day high which now becomes the next target. The Short term Stochastics Oscillator is at 18 and Relative Strength Index near 39.
Fundamental Report: The Gold market experienced its first decline in four weeks, shaped by a mix of U.S. economic reports, Federal Reserve policy prospects, and currency trends, sliding below the $2,050 level. A significant factor last week was the U.S. labor market’s unexpected strength. The Non-Farm Payrolls report showed an addition of jobs well above market estimates, casting doubts on an early Federal Reserve rate cut in March. This robust job growth exerted a downward pull on gold prices, though this was partly balanced by weaker ISM service sector data, signaling a potential economic slowdown. The ascension of the U.S. Dollar and 10-year Treasury yields to their three-week peaks played a crucial role in the retreat of gold prices. The strengthened dollar reduces gold’s attractiveness to holders of other currencies, contributing to its price fall. The speculation around the Federal Reserve’s rate decisions has been a driving force in recent market movements. Although more aggressive rate cuts were expected earlier, the recent labor market data has led to more cautious expectations. The ambiguity in the Fed’s policy meeting minutes has spurred diverse market predictions. The upcoming CPI and PPI reports are critical. Forecasts suggest a potential rise in the headline CPI by 0.3% month-on-month, with core CPI (excluding food and energy prices) also expected to increase by a similar margin. These figures, if realized, would indicate a cooling inflation trend but still above the Fed’s 2% annual target. Such outcomes could impact the timing and scale of anticipated interest rate cuts. In conclusion, gold traders should brace for a week where economic reports, especially the CPI and PPI, could significantly sway market sentiments. These reports will not only influence the Federal Reserve’s rate decision but also shape the U.S. Dollar’s strength and Treasury yields, directly affecting gold prices. Closely monitoring these developments will be essential for understanding gold’s short-term movements.