Gold Technical Report: Gold prices slipped further yesterday for a scond consecutive day after slipping from the intra day high near 10 days EMA @ 1918. The prices continued to trade below the conjunction point of 50 days EMA and 100 days EMA near 1928 but hovering around support near 200 days EMA @ 1909 . Major resistance lies near 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 12 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 41 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved down parallely after 2 green shoots, to continue the decline for eight consecutive day earlier. It had moved above 200 days EMA @ 23.00 during the day but could not sustain. Last week alone, prices have crossed below 50 days EMA and 100 days EMA which are at conjuction point 23.50 and then 10 days EMA @ 23.20. The Short term Stochastics Oscillator is at 6 and Relative Strength Index near 37.
Fundamental Report: Gold prices reacted forcefully yesterday as the CPI (Consumer Price Index) was released , and predictions that headline inflation had risen by 0.6% last month forecasted by economists polled at the Wall Street Journal were spot on. Last month inflation had its largest month-over-month gain this year. However, economists polled by the WSJ slightly underestimated the rise in the core CPI which was predicted to increase by 0.2% and came in hotter with a rise of 0.3%. According to the BLS (Bureau of Labor Statistics), “The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3.7 percent before seasonal adjustment”. Inflation rose annually from 3.2% in July to 3.7% in August. This means that the Federal Reserve’s 2% target will unlikely be reached this year. But, according to the CME’s Fedwatch tool, traders’ expectations that the Fed will maintain its current terminal rate intact at the FOMC meeting next week increased from 92% yesterday to 97% today, and the probability of a continuation of the pause at the November FOMC meeting strengthening from 55.8% yesterday to a 58.4% probability today.