Gold Technical Report: Gold opened up with a gap yesterday and rallied up vigorously on the bck of superioir performance in earlier session. It seems to be coming out of pessimism of earlier few bearish sessions and bounced up from the support of 50 days Exponential Moving Average to close above 10 days EMA. Last week it witnessed volatile movement when it crossed above 2100 mark upside and also drifted down below 2050 at the close on the same day. The short term Stochastics Oscillator is at 36 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 60 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up parallely for second day after a 7 days of consistent downfall earlier. This week it has forcefully crossed above all 50,100 and 200 days Exponential Moving Average on closing basis. It has started decline earlier on massive profit booking after it hit 25.88 intra day high last week which now becomes the next target if rally sustains. The Short term Stochastics Oscillator is at 44 and Relative Strength Index near 55.
Fundamental Report: Gold is a value asset frequently chosen by investors during periods of heightened geopolitical tensions and economic uncertainty, due to its role as a store of value, and 2024 is likely to be a year with many risks for several reasons. The first one is the trajectory of monetary policy around the world, especially in the United States.Based on yesterday’s dot plot from the FOMC members, investors are now expecting the Fed to cut interest rates 3 times in 2024 for a total of 75 basis points, as inflation is likely to continue decreasing towards the target of 2%, and employment and growth seem resilient enough. Lower interest rates are usually good for Gold, as the USD and Treasury yields usually weaken. Accommodative monetary policies tend to weaken the local currency compared to its peers, which might provide higher interest rates and therefore investment opportunities with higher returns.