Gold Technical Report: The gold witnessed a mixed rangebound activity yesterday and posted a DOJI on the daily charts. The prices this week not only crossed over but also closed above the main level of $1671, where the medium-term trend will turn positive. Also at the same level is resistance as the current 50 DMA on Daily charts. The short-term Stochastics Oscillator is at 89 and the Relative Strength Index is at 54.
Silver Technical Report: The silver prices also parallel with Gold continuing the bullish trend. The positive for silver unlike gold is that prices were already above 50 DMA and now are fast approaching 200 DMA. On the downside, major support is only at 18.00, crossing below which will change the medium-term trend into negative. On the upside, a crossing of 200 DMA at 21.44 will change the main trend to positive. The Short term Stochastics Oscillator is at 87 and the RSI momentum is near 56.
Fundamental Report: On Thursday, November 11, the BLS (Bureau of Labor Statistics) will release the latest inflation report vis-à-vis the CPI index for October 2022. While many analysts and market participants are expecting (hoping) that the Federal Reserve will begin a pivot from dramatic and strong rate hikes at each FOMC meeting to a pause in hikes during the first half of next year. The sad truth is that the most accurate and current forecast is indicating that inflation remains entrenched with the CPI above 8% and the PCE above 6%. The PCE is still three times above the Fed’s target inflation rate of 2%. Americans and global citizens are acutely aware of inflation remain entrenched, persistent, and high as their data comes from the price they are paying for goods and services.
As It is still early to predict what the Federal Reserve will do at the December 14 FOMC meeting. However, according to the CME’s FedWatch tool, Fed fund futures traders are split almost equally between whether or not the fed will raise rates by 50 or 75 basis points. There is a 52 % probability that the Federal Reserve will raise rates by 50 basis points and a 48% probability that the Fed will raise their benchmark rates by 75 basis points. This would take the benchmark rate to between 425-450 basis points or between 450 – 475 basis points if the Fed raises rates by 75 basis points. Regardless of what actions the Federal Reserve does at their next FOMC meeting, one thing is exceedingly clear; after five consecutive rate hikes at every FOMC meeting since March inflation according to the CPI remains above 8%. It is difficult to perceive that the Federal Reserve will begin to pause or ease interest rate hikes as long as inflation remains at a 40-year high.