Gold Technical Report: The gold prices resumed the downtrend as the prices shy away from 50 DMA and broke below 1700 levels on selling pressure. Yesterday’s slippage down the main bottom at $1676 poses the risk of the main trend turning negative. Today’s close on the weekly charts will be very crucial. On the upside, the next resistance will be at 50 DMA @ 1736. The Short term Stochastics Oscillator is at 5 and RSI momentum is 30.
Silver Technical Report: Silver witnessed a good upmove last week with reversal signs as it crossed above 20 DMA. However yesterday showed a correction as it followed suit with Gold and posted 50 DMA below crossover. The next major resistence will be faced around 20.20 wich is a triple support in mid-August. The Short term Stochastics Oscillator is at 48 and RSI momentum near 49.
months earlier in the session. The market is being pressured by increased prospects of more aggressive rate hikes by the Federal Reserve and a stronger U.S. Dollar. Currently, the FedWatch Tool is calling for a rate hike of 75 to 100 basis points at next week’s central bank policy meeting. The SPDR Gold Shares ETF (GLD) settled at $157.92, down $0.62 or -0.39%. Ahead of today’s New York trading session, short-term U.S. Treasury yields continued to rise as investors weighted the prospect of larger rate hikes from the Federal Reserve at its September 20-21 meeting. The yield on the 2-year Treasury, which is among those most affected by Fed decisions, rose 4 basis points to 3.823%, its highest level since 2007. It’s risen roughly 25 points since Tuesday. Over the last six months, monetary policies of the Federal Reserve have had a minimal to almost nonexistent effect taking inflation from 9.5% in June to 8.3% in August. Reducing inflation by only 1.2% in six months cannot be considered successful. Ask any middle-class American if they feel like they have seen some monetary relief as inflation has moved down by just over percent. It seems highly unlikely. On multiple occasions throughout history Chairmen of the Federal Reserve have had to resolve and reduce high inflation. Paul Volcker, Alan Greenspan, and Ben Bernanke all were burdened with this issue. These Federal Reserve Chairman all took an exceedingly aggressive stance to tackle the problem. Volcker, Greenspan, and Bernanke accomplished this task by moving interest rates above the level of inflation. The path of the current Federal Reserve assumes that they can try something different and still accomplish their intended goal of moving inflation back to 2%. However, the ugly truth is that much more rate hikes are needed and rates will have to remain elevated for a lot longer than most people realize to have any dramatic effect on lowering inflation levels.