Gold Technical Report: Gold prices traded rangebound in yesterday with a negative bias as it closed near 200 days EMA @ 1908 .10 days Exponential Moving Average @ 1922, which had crossed below 100 EMA @ 1936 last week, indicating bearishness.. If prices move above 1959 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 6 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 35 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices are on a continuous decline mode from the start of this month and yesterday closed below 200 days EMA @ 22.70 for the first time in last 2 months. Technical buying at these crucial levels may prompt quick short term uptick here. The 10 days EMA @ 23.03 had last week crossed below 100 days EMA @ 23.52 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 7 and Relative Strength Index near 35.
Fundamental Report : After last week’s dramatic decline in gold, the first trading day of the week too indicated a continuation of the down-trend based on the most recent economic data. Dollar strength was entirely responsible for gold’s price decline today. It was certainly the major component moving gold lower. The dollar gained 0.35% in trading taking the index to 103.05. Last week, data showed that the U.S. CPI rose moderately in July. But because producer prices increased slightly more than expected, members of the Federal Reserve are expressing concerns that their fight against inflation is not over and as a result could keep rates higher for longer. The most recent economic data shows that the economy in the United States is strong and resilient and for the most part has led the Federal Reserve and economists to believe that a recession is not likely. The new acronym for the end game from the aggressive monetary policy of the Fed is no longer a “hard landing” or a “soft landing” but a “no landing”. The meaning behind this acronym is that economic growth that is too strong to allow inflation to fall to the Fed’s target of 2% easily, suggesting that the Fed will need an additional rate hike to secure the proper path to their 2% target. However, according to the CME’s FedWatch tool that will not occur at next month’s FOMC meeting with an 88.5% probability that the Federal Reserve maintain its current interest rate of between 5 ¼% and 5 ½%. Investors are awaiting the next important event the release of last month’s FOMC meeting minutes on Wednesday.