Gold Technical Report: Gold prices moved up strongly and closed above 50 days Exponential Moving Average @ 1945 after more than a month. As 10 days EMA @ 1932 is poised to cross above 100 DMA @ 1936, further upside movement looks possible , which if crossed with strong volumes, will open room for further advancement upto the major psychological level of 2000. Main support level is near 200 days EMA @ 1870. The short term Stochastics Oscillator is at 91 (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).
Silver Technical Report: Silver marched ahead strongly with good volumes. It crossed above both 50 and 100 days EMA and posted a big green candle on daily charts. The main target now is 25.00 , a major psychological level for silver and the main support is near 200 days EMA @ 22.44. The Short term Stochastics Oscillator is at 91 and Relative Strength Index near 62.
Fundamental Report: Yesterday, Labor Department released the latest inflationary report, the Consumer Price Index (CPI) for June. The report revealed that inflation has declined to its lowest monthly increase since August 2021. The Consumer Price Index gained 0.2% last month double the increase of 0.1% in May. The vast majority of increases in consumer pricing was in the category of shelter which made up 70% of last month’s rise in the CPI. Increases were also evident in automobile insurance, and fuel which rose 1.0 %. However, there was a significant decrease in the cost of used trucks and cars. The rate of core inflation slowed from 5.3% in May to 4.8% last month. The importance of this decline is that the Federal Reserve believes that the core rate is the best predictor of inflationary trends. However, core inflation at 4.8% is still more than double the Fed’s target of 2% so even with last month’s decline the report indicates that both headline and core inflation continues to be troublesome as each month brings higher pricing for consumers across-the-board. The inflation is declining considering that it is roughly half of last year’s inflation rate of 9.1%. However, inflation is still running at a level that is unlikely to soften the resolve of the Federal Reserve from raising rates two times this year. There continues to be an exceedingly high probability of an interest rate hike of ¼% by the Federal Reserve at the next FOMC meeting at the end of this month. According to the CME’s FedWatch tool, the probability of ¼% rate hike implemented on July 26 is 92.4%, down fractionally from yesterday’s forecast of 93%, and 90.5% one week ago. There is however only a 12.9% probability that the Fed will implement back-to-back rate hikes in both the July and September FOMC meeting.