Gold Technical Report: Gold played rangebound yesterday as it tries to make a base near 50 DMA @1856. Till the 50DMA is trading over 200 DMA @1775, 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 20 and Relative Strength Index is at 43.
Silver Technical Report: The silver prices also remained rangebound after bouncing back from the 100 DMA @21.75. The medium-term trend looks up as the prices continue to trade above 100 DMA. As 50 DMA @23.34 trades above 200 DMA @20.98 on daily charts, gives an indication of Buy on Dip. The Short term Stochastics Oscillator is at 15 and the RSI momentum is near 36.
Fundamental Report: Investors are waiting for the next report on headline inflation, the CPI today. They hope to gain better insight into possible pivots by the Federal Reserve concerning their rate hikes. In December the Federal Reserve released its most current economic projections and “dot plot” which contained the anticipated rate changes by the Federal Reserve as 17 Federal Reserve members placed their opinion (as a dot). December’s projections of interest rates in 2023 contained the stark realization that unanimously voting members of the Federal Reserve anticipated taking the current benchmark rate higher with the goal of just over 5% and maintaining those elevated rates throughout the entire calendar year of 2023. The elevated hawkish tone reflecting expected actions by the Federal Reserve began to factor into the current pricing of precious metals, US treasuries, and stocks. A faction of market participants continues to believe that there would be rate cuts this year contrary to what the Federal Reserve’s narrative was and continues to be. However last week’s Federal Reserve announced that they might have to take rates to a higher target closer to 6%. This most likely is what prompted the selloff at the end of last week.