Gold Technical Report: Gold prices shot up yesterday after crossing above the 200 DMA at 1789 and then also the crucial 1800 mark. The Major support stands at 50 DMA @1717 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 62 and the Relative Strength Index is at 64.
Silver Technical Report: The silver prices, parallel with gold prices marched up smartly yesterday. The prices continue to trade above 200 DMA @21.20. On the downside, major support is only at 50 DMA @20.77, crossing below which may change the medium-term trend into negative. The Short term Stochastics Oscillator is at 78 and the RSI momentum is near 69.
Fundamental Report: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in November on a seasonally adjusted basis, after increasing 0.4 percent in October, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 7.1 percent before seasonal adjustment. The index for shelter was by far the most significant contributor to the monthly all-items increase, more than offsetting decreases in energy indexes. The food index increased 0.5 percent over the month with the food at home index also rising 0.5 percent. The energy index decreased 1.6 percent over the month as the gasoline index, the natural gas index, and the electricity index all declined.
Today the Federal Reserve will conclude its last FOMC meeting this year which will be followed by the release of a Fed statement and a press conference led by Chairman Powell. Because of the CPI report, the Fed may be needed to slow the pace of rate hikes. According to the CME’s FedWatch tool, there is still an exceedingly high probability (79.4%) that the Federal Reserve will raise rates by 50 bps tomorrow. Looking ahead, the probability of a smaller rate hike at the Fed’s first FOMC meeting next year has had a dramatic revision in a single day. Yesterday it indicated a 35.1% probability of a 25-bps rate hike in February which was revised today to 52.3%. The Fed’s probability of raising rates by 50 bps in February dropped from 51% yesterday to 40.5% and a 7% probability of a 75-bps hike.