Gold Technical Report: Gold prices opened near the previous close and marched ahead making 3 white soldiers pattern on daily charts. Both 10 Day Moving Average (DMA) @ 2008 and 50 DMA @1908 are trading above 200 DMA @1792 hence, the medium-term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 66 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 68 (it is considered overbought when above 70 and oversold when below 30) .
Silver Technical Report: The silver prices rallied further for the fifth consecutive day after striding bottleneck around 25.00 and now trading near the 12 month high. It has a strong support near the common area of 100 DMA @ 22.88 and 50 DMA @ 22.44. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.19. The Short term Stochastics Oscillator is at 89 and Relative Strength Index near 80.
Fundamental Report: The Gold price action suggests investor indecision and impending volatility. Traders are currently thinking about two possible scenarios for the Federal Reserve’s response to Wednesday’s US CPI report. The first scenario is that the Fed will increase rates by 25 basis points at their May 3 meeting and then stop raising rates further. The second scenario is that the Fed will raise rates and suggest that they will need to raise rates again in June.
Gold prices increased for the third consecutive day due to weaker-than-expected US inflation data. The US Consumer Price Index (CPI) rose by only 0.1% in March, below the expected increase of 0.2%, which led traders to believe that the Federal Reserve may only increase interest rates once more before pausing. Economists predict that the Federal Reserve will raise interest rates once more in May before pausing its tightening campaign in June. The US CPI data suggests that the Fed’s hiking cycle may be ending soon also, leading to lower Treasury yields and a weaker dollar, supporting gold prices. San Francisco Fed Bank President Mary Daly stated that tighter credit conditions could suggest the need for a pause in rate hikes. Richmond Fed President Thomas Barkin said that the Fed still needs to work on bringing inflation down to its 2% target. The recent worries about recession have led to an increase in gold prices as it is seen as a safe-haven asset.