Gold Technical Report: Gold dropped yesterday on selling pressure after a much volatile movement both sides. It also gave a close below 50 DMA for the first time in almost 3 months. Till, the 50DMA @ 1858 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 15 and Relative Strength Index is at 39.
Silver Technical Report: The silver prices also yielded to selling pressure and closed near the 100 DMA @ 21.80. The medium term trend looks up as the prices continue to trade above 100 DMA. As 50 DMA @ 23.33 trades above 200 DMA @ 20.96 on daily charts, gives indication of Buy on Dip. The Short term Stochastics Oscillator is at 19 and RSI momentum near 32.
Fundamental Report: Investors and Traders react to the higher-than-expected U.S. inflation reports, which indicated that inflation remained a serious problem. The market tried as hard as it could to hand onto the fact that headline CPI numbers out of the US were largely as expected. But ultimately, on the whole, the inflation data came in above forecast, with the services component running particularly hot at 7.2% to a fresh 40 year high. US January CPI came out broadly in line with expectations, as headline CPI grew 0.5% m/m and core CPI 0.4%. That said, the details continued to illustrate persistent underlying price pressures, and markets reacted by pricing in a larger probability of Fed continuing its hiking cycle beyond May and now pricing a peak rate around 5.25% in July. Core Services ex. Shelter inflation remained steady at 0.6% m/m, but the figure was pulled down by negative contribution from healthcare inflation, largely linked to negative base effects in health insurance prices. Excluding healthcare and shelter, core services inflation picked up to 0.65% m/m (from 0.35%), while core goods CPI also rose by 0.07% after three months of consecutive decline.It’s questionable how much this would affect the consensus for the Fed’s next meeting on 22 March. Currently another single hike is expected by around 90% of participants, which would take the funds rate to 4.75-5%. A shift in expectations to a double hike would probably need a significantly higher figure for inflation than currently expected.