Daily Report – 11 May 2023

11 May 2023
OTC Market Data
High
Low
Close
Previous
Change USD
Change %
Gold
2048
2021
2030
2034
-4.00
-0.20%
Silver
25.90
25.20
25.36
25.60
-0.24
-0.94%

Gold Technical Report: Gold prices retraced a bit yesterday but managed to find support and close above 10 DMA @ 2020. The selloff started last week when the new highs around 2082 attracted profit booking. Both 10 DMA and 50 DMA @ 1968 are trading above 200 DMA @ 1819 hence, 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 at 41 (it is considered overbought when above 80 and oversold  when below 20) and Relative Strength Index (RSI) is at 58 (it is considered overbought when above 70 and oversold when below 30) .

Support 3
Support 2
Support 1
Current Market Price
Resistance 1
Resistance 2
Resistance 3
1980
2004
2020
2032
2050
2082
2100

Silver Technical Report: The silver prices also declined following the suit, as some dullness creeping in after Friday’s selloff. It has a strong support near the common region around 23.80/23.40 of 50 DMA and 100 DMA respectively. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.76. The Short term Stochastics Oscillator is at 46 and Relative Strength Index near 56.

Support 3
Support 2
Support 1
Current Market Price
Resistance 1
Resistance 2
Resistance 3
24.42
24.76
25.00
25.35
25.60
26.88
26.11

Fundamental Report: Gold Investors were nervously waiting for the release of the latest consumer price index reports yesterday. U.S. inflation data did not provide support to gold and silver markets. US inflation figures were slightly weaker-than-expected, which caused US yields to decline and improved the rather fragile risk sentiment. Headline inflation came out at 4.9% y/y, while core inflation printed at 5.5% y/y. On a monthly basis, both headline and core inflation were at 0.4%. Details were to the soft side, especially the important services ex. shelter component showed signs of easing underlying price pressures, which is good news for the Fed. The soft CPI print caused US yields to decline, most notably in the front-end. For now, it seems like the Fed pause has been consolidated and 3×0.25pp of rate cuts are priced in the second half of the year from the Fed in bond markets. Another major catalysts for higher Gold prices this month is unquestionably the looming risks of a U.S debt default. Right now, the U.S is $31.4 trillion in debt. This staggering amount is in the spotlight because the U.S government will not be able to pay its bills if Congress cannot agree to raise the debt ceiling by June 1. According to U.S Treasury secretary Janet Yellen “the impact of a U.S debt default on the global economy could rival the 2008 financial crash”.

The Bank of England (BoE) will announce its interest rate decision on Thursday, May 11 at 11:00 GMT and as we get closer to the release time, here are the expectations forecast by the economists and researchers of 10 major banks. This is a Monetary Policy Report meeting, so we will have updated the forecasts for growth and inflation. The BoE is widely expected to raise rates by 25 basis points (bps) from 4.25% to 4.50% in May.

Key US Economic Reports & Events
When
Actual
Expected
Previous
Core PPI m/m
4:30 PM
0.2%
0.2%
- 0.1%
PPI m/m
4:30 PM
0.2%
0.3%
-0.5%
Unemployment Claims
4:30 PM
264K
245K
242K
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