Gold Technical Report: Gold prices advanced further and closed near remained sideways yesterday between 100 days Exponential Moving Average @ 1933. Main support level is near 200 days EMA @ 1863. The immediate resistance level is near 50 days EMA @ 1951 , which if crossed with strong volumes, will open room for further advancement upto the major psychological level of 2000. The short term Stochastics Oscillator is at 83 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 51 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver faced selling pressure yesterday but managed to hold support near 10 days EMA @ 23.00 and bounced back from intra day low . The main support is near 200 days EMA @ 22.42 and main resistance level is near 50 Days EMA @ 23.44 to show strength. The Short term Stochastics Oscillator is at 82 and Relative Strength Index near 51.
Fundamental Report: Generally, gold has been considered a safe haven asset and a hedge against inflation, leading to higher prices during periods of inflation. Conversely, gold has historically lost value when reports indicate lower inflation. In recent times, the relationship between gold prices and inflation reports has become more complex. This is largely due to the Federal Reserve’s aggressive monetary policy, which involves raising interest rates to combat the current inflation rate to bring it down to the Fed’s target of 2%. Therefore, if the upcoming Consumer Price Index (CPI) report shows a decline in inflation as predicted, it would generate bullish market sentiment for gold. In such a scenario, a decrease in inflation would alleviate pressure on the Federal Reserve to pursue more aggressive rate hikes. The current forecast suggests that data will reveal the lowest level of inflation in the United States in over two years. This outcome is a direct consequence of the Federal Reserve’s aggressive monetary policy, which has resulted in 10 out of the last 11 Federal Open Market Committee (FOMC) meetings resulting in rate increases, taking the benchmark interest rate from near zero to between 5% and 5 ¼%. According to an article penned by Martin Baccardax in TheStreet, “Wall Street forecasts suggest headline consumer prices rose 3.1% over the month of June, compared to the four-decade high of 9.1% recorded over the same period last year and the 4% pace reported in May. On a monthly basis, Street forecasts pegged headline CPI at 0.3%, a nudge faster than the 0.1% pace tallied in May thanks in part to higher gas prices, with core easing to 0.3% from 0.4%.”