Gold Technical Report: Gold posted a robust performance last week and continues the rally this week. It has strong support at 20 DMA in 1832. The rally continues strongly after it has overcome the important psychological 1800 mark and nears another @1900. The Medium term support stands at 200 DMA @1779 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 86 and Relative Strength Index is at 70.
Silver Technical Report: The silver prices, parallel with the gold prices registered a robust performance yesterday after 3 straight days of correction. The medium-term trend looks up as the prices continue to trade above 50 DMA @22.55. As 50 DMA has crossed above 200 DMA @21.06 on daily charts, gives an indication of Buy on Dip. The Short term Stochastics Oscillator is at 46 and the RSI momentum is near 55.
Fundamental Report: The Dept of Labor flashed on Thursday that the Unemployment Claims figures declined to 205K about which, the market expectations were 216K. At the same time, the Bureau of Labor Statistics reported that inflation in the US, as measured by the Consumer Price Index (CPI), declined to 6.5% every year in December from 7.1% in November. This reading came in line with the market expectation. Every month, the CPI declined by 0.1% following November’s increase of 0.1%. Further details of the publication revealed that the Core CPI, which excludes volatile food and energy prices, edged lower to 5.7% every year from 6% as expected. Finally, Core CPI rose by 0.3% every month. Figures from The mixed data, meanwhile, reaffirm market expectations for a less aggressive policy tightening by the Federal Reserve (Fed) and keeps the US Treasury bond yields depressed. The yield on the benchmark 10-year US Treasury note languishes near a multi-week low amid rising bets for smaller Fed rate hikes going further. This, in turn, caps the attempted USD recovery and provides a fresh lift to the non-yielding Gold price.
Also, earlier this week, The World Bank unveiled its global economic prospects report this week. The international financial institution has already expressed concerns about the global economic outlook, warning of recession risk in 2023. Should the forecasts point to a global economic slowdown, another wave of risk aversion could sweep across markets as investors rush to safety. “Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine, according to the World Bank’s latest Global Economic Prospects report. Given fragile economic conditions, any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade. The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies.”