Gold Technical Report: Gold posted a robust performance last week and ended the week with a solid green candle. Gold has strong support at 200 DMA at 1779. The rally continues strongly after it has overcome the important psychological 1800 mark. The Medium term support stands at 50 DMA @1766 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 78 and Relative Strength Index is at 68.
Silver Technical Report: The silver prices, parallel with gold prices, registered a smart performance last week. The medium-term trend looks up as the prices continue to trade above 200 DMA @21.07. As 50 DMA @22.20 has crossed above 200 DMA on daily charts, further fire-up in the rally is expected. The Short term Stochastics Oscillator is at 41 and the RSI momentum is near 58.
Fundamental Report: The jobs report for December revealed that the labor market finished 2022 on a strong note with December adding 223,000 new jobs. This was well above estimates which anticipated an additional 200,000 jobs were added last month. Additionally, a report by the Institute for Supply Management revealed its non-manufacturing PMI decreased from 56.5 in November to 49.6 last month. This was the first contraction month over month in more than 2 ½ years. Collectively these two reports could have a strong impact on the monetary policy of the Federal Reserve because they might lower the probability of a recession. Investors are looking for a buying opportunity on signs of a bounce. That could be a situation where the move happens early next week unless of course the jobs number completely turns around the idea of a heated-up employment market on Friday. Major economies such as the UK and Eurozone are believed to be already going through an economic contraction. The US – the world’s largest economy – is expected to experience a downturn later this year. Minutes released by the Fed last week cemented sentiment by Federal Reserve officials who unanimously agreed that the central bank should slow the pace of rate hikes while maintaining the current elevated level. While there is very little hope that the Federal Reserve will reduce rates according to the minutes released rate hikes should be limited to their upper target of approximately 5.1% vis-à-vis its benchmark Fed funds rate.