Gold Technical Report: Gold moved in narrow band and closed with a DOJI candle yesterday indicating indecision. It has been on a south mode since beginning of the new year and closed below support of 10 days Exponential Moving Average for sixth consecutive day. It had struggled and come out of upper range maintained by the market for earlier few sessions looking poised to touch 2100 again. Recently it witnessed volatile movements when it crossed above 2100 mark upside on 4th Dec and also drifted down below 1980 on 12th Dec. The short term Stochastics Oscillator is at 23 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 49 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices declined for the third straight session as the struggle continues to regain 10 days EMA for last 6 days. Last week it had breached the support of 10 days Exponential Moving Average and fell further forcefully crossing below all 50,100 and 200 days Exponential Moving Averages on closing basis in a single day. Thus it It has fully reversed the upmove of 13th Dec when it had crossed above all these averages to later hit 25.88 intra day high which now becomes the next target. The Short term Stochastics Oscillator is at 20 and Relative Strength Index near 41.
Fundamental Report: The Market participants are focusing on CPI data on inflation, which will be followed by the PPI report on Friday. Economists are forecasting that headline inflation has increased and projected a rise of 0.2% in December, which would take inflation year-over-year from 3% to 3.2%. Although the Federal Reserve’s preferred measure is core inflation, headline inflation is a primary focus of consumers as it also looks at increases in food and energy prices. This could weigh heavily on the Federal Reserve’s announcement of upcoming rate cuts this year. According to the Fed’s “dot plot” as well as Chairman Powell’s press conference after the December FOMC meeting, the Federal Reserve intends to cut rates by three-quarters of a percent this year. The overwhelmingly optimistic outlook by Fed funds traders and the investment community could easily be stifled if inflationary data tomorrow and Friday’s PPI report do not indicate progress in the Federal Reserve’s fight against inflation.