Gold Technical Report: Gold prices on Friday, remained in narrow range and posted a Gravestone Doji on daily charts after four straight days of decline earlier. 10 days Exponential Moving Average @ 1926, which had crossed below 100 EMA @ 1939 last week, indicating bearishness. The primary trend support is near 200 days EMA @ 1908. If prices move above 1964 which is last 3 months TrendLine resistance, it will open room for further advancement upto the major psychological level of 2000 and above. The short term Stochastics Oscillator is at 5 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 34 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Last week Silver prices declined consistently and closed below 200 days EMA @ 22.71 for second time in last 2 months. Technical buying at these crucial levels may prompt quick short term uptick here. The 10 days EMA @ 23.12 had last week crossed below 100 days EMA @ 23.54 indicating bearishness. The prices are currently hovering around Primary Trend support near 200 EMA and need to stabilize here for any real reversal. The Short term Stochastics Oscillator is at 3 and Relative Strength Index near 34.
Fundamental Report : Gold, a time-honored safe haven, hit a five-week low last week, overshadowed by a resurgent U.S. dollar and an uptick in bond yields. This dip is largely attributed to Friday’s data which highlighted a more-than-anticipated rise in July’s producer prices, pushing the dollar to heights unseen since July 7. The Producer Price Index (PPI) for final demand in the US rose 0.8% on a yearly basis in July, up sharply from 0.1% increase recorded in June, the data published by the US Bureau of Labor Statistics revealed on Friday. This reading came in slightly higher than the market expectation of 0.7%. The annual Core PPI increased 2.4% in the same period, matching June’s reading. On a monthly basis, the PPI and the Core PPI both rose 0.3%. Notably, the correlation between gold and the U.S. dollar continues to be significant. As bond yields and commercial rates gear up for a climb, the dollar finds itself on an upward trajectory. This poses a challenge for gold. Higher Treasury bond yields and surging interest rates increase the opportunity cost of holding non-yielding gold, which traditionally finds its value pegged to the dollar. This week holds weight for gold traders, with significant data releases lined up. While China preps to unveil its retail sales and industrial output numbers on Tuesday, eyes are also set on the U.S. retail figures, slated for release the same day. However, the main event remains the U.S. Federal Reserve’s July meeting minutes, expected on Wednesday. Experts are prepping for a hawkish tone, which may exert further downward pressure on gold.