Gold Technical Report: Gold witnessed selling pressure after three straight sessions of rally and closed below 10 days Exponential Moving Average. Recently it witnessed volatile movements when it crossed above 2100 mark upside on 4th Dec and also drifted down below 1980 on 12th Dec. The short term Stochastics Oscillator is at 27 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 44 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also declined parallel and closed below 10 days EMA. It had posted a DOJI candle yesterday, signifying indecision after a good bounce back a day before, when it crossed above all 50,100 and 200 days Exponential Moving Averages on intra day high basis but could not sustain. The Short term Stochastics Oscillator is at 23 and Relative Strength Index near 37.
Fundamental Report: The recent comments by multiple officials of the Federal Reserve have forced overly optimistic analysts and market participants to have a more realistic viewpoint of the timing and depth of interest rate cuts this year. In a speech today at the Brookings Institution, one of the Fed’s twelve voting members, Governor Christopher Waller, reinforced what Chairman Powell said at his press conference in December. His statements spoke to counter the overly optimistic anticipation by many market participants saying that while interest rate cuts are likely this year, the central bank can take its time relaxing monetary policy. Governor Waller’s speech comes after multiple Federal Reserve officials addressed the timing and number of rate cuts the Fed will implement this year. New York Fed President John Williams last Wednesday expressed that he only sees rate cuts occurring when the Fed is confident inflation is substantially moving back to its 2% target. Last week, Cleveland Fed President Loretta Mester told Bloomberg TV that the idea of a rate cut in March is probably too early. Richmond Fed President Tom Barkin said he is still looking for conviction that inflation is on track to reach the Fed’s 2% goal, and Chicago Fred President Austan Goolsbee said more data is necessary before rate cuts can begin. Collectively, these statements along with equally guarded remarks by ECB officials reinforce the idea that a March rate cut is unlikely. Expectations for rate cuts this year by the Fed remain consistent with Chairman Powell’s comments that the Fed will cut rates by 75 basis points and begin these cuts probably by the end of the second quarter. However, market participants had been overly optimistic that the rate cuts by the Fed could begin earlier and be deeper than the narrative presented by Chairman Powell in December.