Gold Technical Report: The gold posted 4 continuous weekly rallies and is marching towards 200 DMA @1842. However since the 50 DMA still trading below 200 DMA , the medium term trend loos still bearish. Any slippage down the nearest main bottom at $1676 will turn the Main trend negative. On the upside, the immediate resistance for main trend is the 200 DMA. The Short term Stochastics Oscillator is at 62 and RSI momentum is near 58.
Silver Technical Report: Silver prices trading registered a strong weekly close above 50 DMA . We may expect fresh buying support emerging against profit booking here, heralding volatility in prices, as they approach 200 DMA. Support levels are ar oung 50 DMA at Next major resistence will be faced only around 21.00, the levels not seen after June. The Short term Stochastics Oscillator is at 72 and RSI momentum near 57.
Fundamental Report: Gold prices edged higher on Friday, following a late session price surge that solidified a fourth week of gains. The catalyst behind the move may have been the paring down of expectations of aggressive policy tightening by the Federal Reserve. Gains may have been limited, however, by a number of hawkish remarks from several Fed members throughout the week. Technical factors may have also contributed to the price action with the market currently sitting inside a key 50% to 61.8% retracement zone at $1798.50 to $1822.60 that could determine the near-term direction of the market. On Friday, December Comex gold futures settled at $1815.50, up $8.30 or +0.46%. The SPDR Gold Shares ETF (GLD) finished at $167.86, up $1.52 or +0.91%. The price action suggests investors were reacting to a dip in Treasury yields, while downplaying a slight uptick in the U.S. Dollar against a basket of currencies.
Gold was primarily supported last week after the dollar index retreated as signs of cooling consumer and producer price inflation in the United States prompted traders to pare bets of aggressive policy tightening by the Federal Reserve. As of Friday’s close, the odds of a 75-bps hike in September had fallen to around 45 percent and the chances of a 50-bps hike had risen to 55 percent. After the release of softer-than-expected U.S. consumer inflation data last Wednesday, Minneapolis Fed President Neel Kashkari said he is sticking to his view that the U.S. central bank will need to raise its policy rate another 1.5 percentage points this year and more in 2023, even if that causes a recession. Chicago Fed President Charles Evans said he believes the Fed has plenty more work to do before inflation is under control. Following Thursday’s lower-than-expected U.S. Producer Price Index report, San Francisco Federal Reserve Bank President Mary Daly warned on Thursday it is far too early for the U.S. central bank to “declare victory” in its fight against inflation. Gold traders could face another week of choppy price action with the U.S. Retail Sales report attracting the most attention along with the Fed minutes on Wednesday. Meanwhile, the price action is likely to be dictated by the divergence between the market’s dovish rate hike expectations and the Fed’s hawkish view about where rates should be headed. Needless to say, both conclusions will be data dependent.