Gold Technical Report: Gold prices declined yesterday after slipping from the intra day high and crossed below 10 days EMA @ 1919. The prices continued to trade below the conjunction point of 50 days EMA and 100 days EMA near 1930 but finding support near 200 days EMA @ 1908 . Major resistance lies near 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 15 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 42 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices are seeing some reprive for last 2 days after a continuous decline for eight consecutive day earlier. It had slipped below 200 days EMA @ 23.06 during the day but regained at the close. Last week alone, prices have crossed below 50 days EMA and 100 days EMA which are at conjuction point 23.55 and then 10 days EMA @ 23.28. The Short term Stochastics Oscillator is at 8 and Relative Strength Index near 38.
Fundamental Report: Gold prices traded nervously, as the market participants are waiting for the CPI (Consumer Price Index) report which will be released today. According to economists polled by the Wall Street Journal, the report will reveal that headline inflation increased by 0.6% last month. If their predictions are correct this would be the largest increase since June 2022. This would take inflation from 3.2% in July to 3.6% last month. The primary cause of this large increase in inflation is dramatically higher oil prices. Oil has risen almost 25% since the end of July. Also, the cost of housing has increased by approximately 7.7% in the past year, considerably higher than the housing and rent costs before the pandemic. Federal Reserve is expected to leave its benchmark interest rate (fed funds rate) unchanged at next week’s FOMC meeting. According to the CME’s FedWatch tool, the probability that the Fed will not raise rates next week is 93%. The probability that the Federal Reserve will maintain its current rate has been 90% or higher for a month now. The probability indicator for rate hikes by the Fed is predicting that there is a 59.3% probability that the Fed will stay the course in November with a 38.1% probability of a ¼% rate hike. According to a poll conducted by Reuters News service, “The Federal Reserve will leave its benchmark overnight interest rate unchanged at the end of its Sept. 19-20 policy meeting and probably wait until the April-June period of 2024 or later before cutting it, according to economists in a Reuters poll.” This is in line with recent statements from Chairman Powell who has been on record since his speech at the Jackson Hole economic symposium to maintain the current elevated interest rates “higher for longer”. The chairman and other members of the Federal Reserve have been resolute as they continue to keep the possibility of additional rate hikes on the table if needed to reach its 2% inflation target.