Gold Technical Report: Gold prices declined further on Friday for the third straight session and dropped to 2000 mark on intraday low basis. In the latter session however it found some support and moved up but still closed below 10 DMA @ 2024. Gold has been facing moderate pressure on continuous profit booking after it made a new high around 2080 earlier this month. for Both 10 DMA and 50 DMA @ 1975 are trading above 200 DMA @ 1821 hence, 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 32 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 54 (it is considered overbought when above 70 and oversold when below 30) .
Silver Technical Report: The silver prices continued downwards drift on Friday as the mood was dampened by Thursday’s selloff. It has a strong support near the common region around 23.90/23.34 of 50 DMA and 100 DMA respectively. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.81. The Short term Stochastics Oscillator is at 12 and Relative Strength Index near 40.
Fundamental Report: Currently, the gold market is influenced by several key factors. The U.S. dollar saw a one-month peak and recorded its largest weekly gain since February. This surge in the dollar’s value made gold less attractive to buyers holding other currencies. Investors turned to safe-haven assets due to concerns about the U.S. debt ceiling and monetary policy, which led to a rise in the dollar against the euro and sterling. The increased demand for safe havens was fueled by a decline in May’s U.S. consumer sentiment, reaching a six-month low. The SPDR Gold Shares ETF (GLD) finished at $186.82, down $0.31 or -0.17%. The SPDR Gold Shares ETF (GLD) finished at $186.82, down $0.31 or -0.17%. The University of Michigan survey revealed that consumer sentiment was negatively impacted by worries about the political dispute over raising the federal government’s borrowing cap. There were concerns that this dispute could potentially trigger a recession.
Additionally, the survey showed a significant increase in consumers’ long-term inflation expectations, reaching their highest level since 2011. This information could influence the Federal Reserve, which had recently signaled the possibility of pausing its interest-rate hikes. Despite the factors supporting the dollar’s strength, its upside is limited due to the impending debt ceiling issues that the market will face in the coming weeks. Treasury Secretary Janet Yellen expressed uncertainty about the exact timing of when the Treasury would run out of cash to pay U.S. government debts, potentially occurring as early as June 1. During times of economic or financial uncertainty, safe-haven assets like gold tend to gain value.