Gold Technical Report: The gold prices are trying to form a base above 1700 levels after the last week’s selloff.The short term trend looks bearish as prices are unable to crossover 50 DMA. Any further slippage down the nearest main bottom at $1676 will turn the main trend negative. On the upside, the next resistance will be at 50 DMA @ 1744. The Short term Stochastics Oscillator is at 66 and RSI momentum is near 44.
Silver Technical Report: Silver witnessed continued selling pressure last week and showing reversal signs as it posted a big bullish candle day before yesterday after an inverted hammer candlestick pattern a day before. After yesterday’s doji candle, its moving higher again for short term. Medium term trend looks bearish as 20 DMA has crossed below 200 DMA on weekly charts. The next major resistence will be faced around 50 DMA around 19.21. The Short term Stochastics Oscillator is at 72 and RSI momentum near 42.
Fundamental Report: Gold prices are inching lower on Thursday after posting a rebound rally the previous session, following a successful test of the key support area at $1700. Fundamentally, bullion is being weighed down by a bounce in U.S. Treasury yields and a slightly better U.S. Dollar. The SPDR Gold Shares ETF (GLD) settled at $159.96, up $1.63 or +1.03%. The EUR and the ECB were in the spotlight today. Today, the ECB hiked interest rates by 75 basis points to 1.25%, the deposit rate by 75 basis points to 0.75%, and the marginal lending facility by 75 basis points to 1.50%. With the policy decision more hawkish than expected, the market attention shifted to ECB President Lagarde and the ECB press conference. In response to the monetary policy decision and statement, the EUR rose to a high of $1.00299. However, through the ECB press conference and before the Q&A, again slid to a low of $0.99575. Furthermore, traders are being a little cautious head of scheduled remarks from U.S. Federal Reserve Chair Jerome Powell. The U.S. trade deficit fell 12.6% in July to a nine-month low of $70.6 billion, reflecting a smaller appetite among Americans for imports and a strong dollar that’s making foreign goods less expensive to buy. Imports dropped 2.9% to 329.9 billion in July. Exports rose 0.2% to $259.3 billion, the government said Tuesday. The shrinking trade gap adds to mounting evidence confirming the U.S. did not fall into a recession in the first half of 2022. The smaller trade gap is expected to give a boost to gross domestic product in the third quarter. The U.S. economy is forecast to expand in the July to September period after GDP declined in the first and second quarters. A lower trade deficit adds to GDP and a rising trade gap subtracts from GDP. The sharp decline in first-quarter GDP largely stemmed from a record trade deficit early in the year. A lower trade gap could “add close to 1.5 percentage points to third-quarter GDP growth, which we forecast will be 3.%,” wrote Paul Ashworth, chief North America economist at Capital Economics, in a note to clients. Fed officials reiterated this week that they still are not convinced that the worst of the U.S. inflation scare has passed, suggesting the central bank will continue to lift rates aggressively. The CME’s FedWatch Tool showed investors believe there is a 78% chance of a 75-basis-point rate hike on September 21.