Gold Technical Report: Gold main trend is still down according to the daily swing chart. A move through the nearest main bottom at $1786 will reaffirm the downtrend. Gold currently settled inside the retracement zone at $1818-$1842. On the upside, the immediate resistance is the 10 and 200 DMA zone at $1842. Another major resistance level is 50 DMA at $1875. A trade through $1875 will change the main trend to up.
Silver Technical Report: Silver prices face resistance around the 10-day moving average of 21.75. Major Support is seen near the May lows at 20.43. The 50-day moving average is trading below the 200-day moving average, which indicates downward momentum. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The trajectory of the MACD histogram is in negative which reflects consolidation.
Fundamental Report: Gold is edging higher on Thursday as traders continue to digest yesterday’s 75-basis point rate hike by the Federal Reserve and post-announcement commentary from Fed Chair Jerome Powell. Gains are being capped by higher Treasury yields and a firm U.S. Dollar.
The market rallied on Wednesday because the Fed rate hike was widely expected. The new concerns for traders are how aggressive the Fed will be with future rates hikes in July and August and whether the economy can withstand those rate hikes.
Powell seems to think the economy and labor market are strong enough to withstand future rate hikes, but wasn’t sure about the size of potential rate hikes in July and September. He also emphasized that future hikes will be data dependent.
That being said, over the near-term, gold is likely to be capped by higher yields and a stronger dollar, but it will also be supported by any weakness in the economy.