Gold Technical Report: Gold prices yesterday received a little reprive after a decline for five straight days but still closed below the major averages. The prices slipped from the intra day high and cound not cross above the conjunction point of 50 days EMA and 100 days EMA near 1934 but kept on trading below 10 days Exponential Moving Average @ 1925. Next support stands at 200 days EMA @ 1908 whereas resistance lies near 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 58 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 50 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices continued the decline on seventh consecutive day as prices could not hold aove close of earlier candle and closed near 200 days EMA @ 22.98. This week alone, prices have crossed below 10 days EMA,50 days EMA and 100 days EMA which are at conjuction point 23.70. Last week it made a the brief intraday high above the psychological mark of 25.00 but it could not hold ground and the reversal started. The Short term Stochastics Oscillator is at 16 and Relative Strength Index near 41.
Fundamental Report: Gold prices witnessed an upward movement as the U.S. Dollar took a step back on Friday. However, despite this temporary rally, the yellow metal is on track for a weekly drop. The reason behind this decline can be attributed to traders overlooking the anticipated temporary pause by the Federal Reserve, choosing instead to zero in on consistent robust U.S. data. The U.S. economy seems to stand strong, with the dollar marking its longest weekly gain in almost a decade, fueled by a series of resilient economic indicators. These include the expansion of the U.S. services sector this August and an unexpected decrease in jobless claims, reaching a low not seen since February. These figures position the U.S. as a vital bastion of strength in the world economy. Recent times have seen the Fed intensifying its fight against inflation, resulting in the benchmark lending rate being elevated 11 times in the past year and a half. This frequency brings the rate to a peak that hasn’t been witnessed for over two decades, addressing inflation which continues to hover above its desired target. Although the summer saw a deceleration in the pace of these hikes, the overall sentiment remains vigilant. In fact, traders predict over a 90% probability that the Fed will maintain rates in September.Statements from various Fed officials indicate caution, suggesting the need to further evaluate data and the overall economic outlook. Lorie Logan, Dallas Fed President, emphasized the importance of readiness for future rate adjustments to counteract inflation. Meanwhile, Fed Governor Christopher Waller expressed the need for prudence, hinting at the weakening jobs market as a significant concern.While gold currently faces headwinds from a potent U.S. dollar and expectations of further rate hikes, its attraction diminishes when juxtaposed with the rising returns from Treasury bonds. The short-term outlook remains cautiously bearish for gold, awaiting clear cues from the Federal Reserve’s imminent decisions.