Gold Technical Report: The gold prices fizzled out from the intraday High of 1808 in the beginning of this week , back to below 1800 mark on profit booking. However it sits just above 50 DMA and trying to find support. Since the 50 DMA (1782) still trading below 200 DMA (1841) on daily charts, the medium term trend loos 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 200 DMA. The Short term Stochastics Oscillator is at 60 and RSI momentum is near 58.
Silver Technical Report: Silver prices look little tired after crossing above 50 DMA (20.20) this week. 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 65 and RSI momentum near 56.
Fundamental Report: Gold prices are trading lower at the mid-session despite another weaker-than-expected U.S. inflation report that suggested the Fed may not have to raise interest rates as aggressively as previously thought. On paper this sounds bullish for gold, but traders are realizing that it’s going to take more than one month of favorable dips in consumer and producer inflation to encourage the Fed to pull back on its plans to raise rates until consumer inflation falls to its mandated 2%. Investors don’t like higher interest rates because bullion doesn’t pay interest to hold it. Therefore, they try to avoid it during a rising rate environment. At 6:30 GMT, gold is trading at $1792, up $3.20 or 0.11%. The SPDR Gold Shares ETF (GLD) is at $166.73, down $0.05 or -0.03%.
Recently, President and Chief Executive Officer of the Federal Reserve Bank of San Francisco Mary Daly mentioned that she is open to a 75bps rate hike in September. Previously, Minneapolis Fed President Neel Kashkari favored higher rates and Chicago Fed President Charles Evans sounded grim over the economic transition. In doing so, the Fed policymakers fail to welcome the latest weakness in the inflation data. On Thursday, the US Producer Price Index (PPI) for July tracked the headline Consumer Price Index (CPI) while easing to 9.8% YoY versus 11.3% prior and 10.4% market forecasts, the data published by the US Bureau of Labor Statistics revealed. Details suggest that the monthly PPI dropped to the lowest levels since May 2020, to -0.5% compared to 1.0% expected and 0.2% prior, which in turn signaled more easing of inflation fears. Elsewhere, US Initial Jobless Claims eased to 262K for the week ending August 6 versus 263K expected and downwardly revised 248K prior. Amid these plays, the US 10-year Treasury yields retreat from a three-week high, also snapping a three-day uptrend, amid recession fears. However, Wall Street closed mixed and Asia-Pacific shares outside Japan grind lower. It should be noted that the pessimism surrounding the US-China tension over Taiwan and covid woes in Beijing also negatively affect gold prices due to the dragon nation’s status as the world’s largest commodity user. Recently, Fitch ratings mentioned that they anticipate a recovery in China’s tourism spending in 2h22 as pandemic-related controls are relaxed. Moving on, the first reading of the US Michigan Consumer Sentiment Index (CSI) for August, expected at 52.5 versus 51.5 prior, is important for the XAU/USD traders to overcome the latest indecision.