Gold Technical Report: Gold prices traded in a narrow range yesterday after slipping from the intra day high and closed near 10days EMA @ 1922. The prices touched briefly the conjunction point of 50 days EMA and 100 days EMA near 1930 but slipped in the end. Next support stands at 200 days EMA @ 1910 whereas resistance lies near 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 33 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 47 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices received some reprive after a continuous decline for eight consecutive day as prices have come down with more pace than gold. It briefly touched 200 days EMA @ 23.23 and slipped at the close. Last week alone, prices have crossed below 50 days EMA and 100 days EMA which are at conjuction point 23.62 and then 10 days EMA @ 23.34. The Short term Stochastics Oscillator is at 11 and Relative Strength Index near 40.
Fundamental Report: Gold prices traded nervously, as the market’s eyes turned towards impending U.S. inflation data. Investors are keen to discern the potential impact on interest rates, especially since the Federal Reserve has hinted at more policy tightening. The currency scenario has added an element of unpredictability: the dollar’s recent retreat boosted gold a tad on Monday, making it more affordable for those trading in other currencies. Yet, as the dollar index shed 0.5%, yields on the benchmark 10-year Treasury note rose, curbing gold’s ascent. The U.S. Consumer Price Index (CPI) data due on Wednesday remains the focal point for traders. It’s believed to be the compass pointing towards the Fed’s interest rate decisions in the coming months. Despite gold’s mild positive start this week, the metal might soon feel the pressure. Market whispers suggest another rate hike may loom this year. While the CME FedWatch tool indicates a 93% probability of the Fed maintaining the status quo in their September meeting, the odds tilt towards a 41% likelihood of a rate hike by November. Fed officials, though cautious about immediate rate hikes, are far from declaring their mission accomplished. For gold to ascend past the $2,000 mark, several dominos need to fall in its favor: the Fed’s hawkish stance needs to soften, and both the dollar index and Treasury yields must retreat. Yet, until the CPI data is revealed, markets are predicted to remain in a lull. A CPI figure aligning with or exceeding expectations might rain on gold’s parade in the short term. With the U.S. dollar index reclaiming some territory pre-CPI data release, gold prices face an uncertain future. The metal’s resilience against a backdrop of a strengthening dollar and elevated U.S. yields is commendable. However, for gold to soar consistently, the winds must blow towards a Fed rate-cutting cycle.