Gold Technical Report: Gold declined further on profit booking yesterday. It opened at 10 days Exponential Moving Average @ 1976 and kept on sliding to post a red Maribozu candle. The prices for last 2 weeks are climbing above July High levels breaking the 2000 mark but shying away from 2010 consistently. The technical pullback last month was strong enough to cross above 50 days, 100 days and also 200 days Exponential Moving Average in a single day. On the reverse, the 10 days EMA has also crossed 200 days and 50 days EMA signifying strength. Gold had been on decline throughout earlier but started the rally with a gap up. Prices had reached at 7 moths low and received a much awaited relief. The short term Stochastics Oscillator is at 40 (it is considered overbought when above 51 and oversold when below 20) and Relative Strength Index (RSI) is at 55 (it is considered overbought when above 48 and oversold when below 30).
Silver Technical Report: Silver prices also declined parallely on profit booking for second consecutive day. It posted a solid green candle on Friday as prices crossed and closed above all 10,50,100 and 200 days Exponential Moving Average in a single day. It is trying hard to hit the Oct month highs near 23.70 but faces a strong resistance above 23.00 due to consistent selling pressure. The Short term Stochastics Oscillator is at 23 and Relative Strength Index near 45.
Fundamental Report: Today, Fed Chair Powell will be in the spotlight. Recent US labor market stats signaled a softer labor market environment. The Fed Chair could indicate whether labor market conditions weakened enough for the Fed to end its rate hike cycle. Fed Vice Chair John Williams, as well as FOMC voting members Michael Barr and Lisa Cook, will also deliver speeches. Diverging views on interest rates could fuel speculation about the Fed ending its rate hike cycle. The pressure also coming amidst a government report that revealed that the budget deficit for the fiscal year ending in September was $2.2 trillion, twice last year’s deficit of $1.38 trillion. Although the geopolitical turmoil continues to rise both in the Middle East and Ukraine, market participants chose to overlook that instead of a major consensus that the Federal Reserve has ended its rate hikes. Market participants now see a high likelihood of rates holding steady in December, with anticipations of policy easing by mid-year. With traders pricing in high chances of the rate hike cycle pausing, and potentially shifting to easing by mid-2023, the immediate trajectory for gold appears cautiously bullish. However, any resurgence in U.S. Treasury yields or unexpected hawkish cues from Fed speeches could undermine this optimism, potentially pressuring gold.