Gold Technical Report: The gold prices crossed 50 DMA at 1785 yesterday and also managed to post a close above it.We may witness it marching towards 1800 mark and can expect some profit booking there.However, since the 50 DMA still trading below 200 DMA on daily charts keeps medium term still bearish. Any slippage down the nearest main bottom at $1676 will turn the Main trend negative. On the upside, the immediate resistance for main trend is the Psychological mark of 1800 and then 200 DMA of 1842. The Short term Stochastics Oscillator is at 80 and RSI momentum is near 58.
Silver Technical Report: Silver prices look little tired after crossing above 50 DMA at 20.33. We may expect fresh buying support emerging against profit booking here, heralding volatility in prices, if they manage to stay above 50 DMA. Next major resistence will be faced only around 21.00, the levels not seen after June. The Short term Stochastics Oscillator is at 80 and RSI momentum near 56.
Fundamental Report: Gold prices tried to move higher at the mid-session on Tuesday, supported by a weaker U.S. Dollar, but capped by a rise in Treasury yields and retraced back in the end. The traders awaited today’s major U.S. consumer inflation report that could further boost the chances of a supersized rate hike on September 21. At 15:47 GMT, gold is trading $1798, up +0.47%. The SPDR Gold Shares ETF (GLD) is at $167.30, up $0.61 or +0.37%. The U.S. Analysts polled by Reuters expect annual inflation to have eased to 8.7% from 9.1% in June. More importantly, Core CPI is expected to come in at 6.1%, up from 5.9%. A lower-than-forecast inflation number, especially Core, could drive gold prices higher, while a stronger number will drive up the odds of a supersized 75 basis-point rate hike, putting pressure on bullion. In other news, a New York Federal Reserve survey showed on Monday that U.S. consumers’ expectations for where inflation will be in a year and three years dropped sharply in July. This suggests we can’t write off a dip in both headline and core inflation.
That being said, even if the report comes in around the economists’ forecast it will not greatly affect the actions of the Federal Reserve at the next FOMC meeting which will run from September 20 – 21. According to the CME’s FedWatch tool, there is a 69.5% probability that the Federal Reserve will initiate its third consecutive 75 basis point rate hike and a 30.5% probability that the Fed will raise rates by 50 basis points. The probability that the Fed will enact the third consecutive 75-basis point hike in September has doubled in the last month. On July 8, 2022, the CME’s FedWatch tool was forecasting that there was a 31.4% probability of a ¾% rate hike in September. Just last week on August 2 the FedWatch tool forecasted that there would be a 41% probability. The dollar has declined fractionally over the last two trading days. Today the dollar index is fixed at 106.195 a decline of 0.12%.