Gold Technical Report: Gold continues the efforts to stabilize after the sharp fall it suffered last week as it approaches 10 DMA @ 1900. Till, the 50DMA @ 1853 is trading over 200 DMA @ 1776, the medium term trend looks upwards. The long term support stands at 200 DMA below which the trend may turn bearish. The short term Stochastics Oscillator is at 18 and Relative Strength Index is at 48
Silver Technical Report: The silver prices also follow the recovery track after facing downfall last week which pushed it below 50 DMA @ 23.39. The medium term trend looks up as the prices continue to trade above 100 DMA @ 21.70. As 50 DMA trades above 200 DMA @ 20.96 on daily charts, gives indication of Buy on Dip. The Short term Stochastics Oscillator is at 12 and RSI momentum near 40.
Fundamental Report: The strong decline in gold on Thursday and Friday of last week marked a definitive price correction as it gave up almost $90 in two days of trading. The sharp decline confirmed that market participants were continuing to digest the exceedingly strong jobs numbers. They were also laser-focused on every word of any Federal Reserve member for insight into their next moves. Even Chairman Powell commented about last week’s jobs report because the expectations were that the report would show 188,000 new jobs were added last month and the actual numbers were double that coming in at 517,000. Powell’s comments expressed that even he did not anticipate such a robust report. However, it gave him more latitude to continue the Fed’s hawkish demeanor in that it confirmed that the economy is still strong even after seven rate hikes last year and an additional hike at the January FOMC meeting. This week’s price action can be best interpreted as uncertainty on the part of gold investors who need more information to fully factor in the expectations of upcoming rate hikes by the Fed and their resolve to maintain elevated levels with no cuts throughout this entire year. The fact that this week’s price action conveyed a potential return to bullish market sentiment also contained no real strength in that potential. It is for that reason too early to act on the information available to us both technically and fundamentally.