Gold Technical Report: Gold prices, registered a green Doji yesterday after it faced selling pressure a day before, and closed below 10 DMA @1826. Since 50 DMA @1869 is trading over 200 DMA @1775, the medium-term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is 34 and Relative Strength Index is 39.
Silver Technical Report: The silver prices too, had dropped drastically a day before yesterday and remained in a narrow range yesterday. Since 50 PMA @21.35 has crossed below @200 PMA @21.49 on weekly charts, it indicates further selling pressure. The medium-term trend can be considered up only if the prices move above 100 DMA @22.06. The Short term Stochastics Oscillator is at 22 and the RSI momentum is near 27, both indicating a current oversold position.
Fundamental Report: On Wednesday, Chairman of the Federal Reserve Jerome Powell finished his semiannual congressional testimony. testimony, he opened the door for a 50-BPS rate hike at the upcoming March FOMC meeting (March 21 – 22). Earlier Tuesday, he also addressed the Senate Banking, Housing, and Urban Affairs Committee. As anticipated the chairman delivered a strong warning that the Federal Reserve will once again modify its monetary policy to deliver tougher rate hikes at a faster pace. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,”. His address to the Senate implies that it is likely that the Federal Reserve will reverse the slower pace evident after the January FOMC meeting in which the Fed announced a 25-BPS rate hike and hence sparked a sell-off in Gold.
According to the CME’s FedWatch, the probability of a more aggressive rate hike of 50-BPS has increased since yesterday from 70.5% to 79.4% today, diminishing the probability of a 25-BPS hike from 29.5% to 20.6%. However, Powell stressed the fact that the Federal Reserve will not make any final decision about the size of a potential interest rate hike until data from Friday’s jobs report and next Tuesday’s CPI report have been released. “We have not made any decision about the March meeting. We’re not going to do that until we see the additional data.” Adding that, “We will be guided by the incoming data and the evolving outlook.”
The ADP numbers released its US private payroll report revealing that an additional 242,000 private sector jobs were added last month. Currently, it is forecasted that Labor Department’s jobs report on Friday will show an additional 203,000 to 225,000 jobs added to the payroll last month. Additionally, economists expect the unemployment rate to rise from 3.4% in January to 3.5% in February. Early forecasts from next week’s Bureau of Labor Statistics consumer price index for February are expected to show a modest decrease in inflation down 0.1% month over month. If correct this would take the monthly gain in February to 0.4% a decrease from January which revealed headline inflation increased by 0.5%.