Gold Technical Report: The gold had posted 4 continuous weekly rallies and was marching towards 200 DMA. However it is going through a correction this week. Since the 50 DMA still trading below 200 DMA , the medium term trend looks still bearish. Any slippage down the nearest main bottom at $1676 will turn the Main trend negative. On the upside, the immediate resistance for main trend is the 200 DMA @1836. The Short term Stochastics Oscillator is at 8 and RSI momentum is near 48.
Silver Technical Report: Silver prices crossed below 50 DMA after crossing above it last week.We may expect fresh buying support emerging against profit booking here, heralding volatility in prices, if they again pull back to approach 200 DMA. The next major resistence will be faced around 50 DMA 20.04. The Short term Stochastics Oscillator is at 10 and RSI momentum near 45.
Fundamental Report: Gold prices are trading lower late in the session on Wednesday shortly after the release of the Fed’s July meeting minutes. The market had been under pressure all session due to higher Treasury yields and a stronger U.S. Dollar, but both eased a little following the release of the minutes.Some are saying there could be a technical bounce higher into the close because the minutes were less-hawkish than expected. According to the CME’s FedWatch Tool, the probability of a 75-basis-point rate hike in September moved down to 38.5% from 61.5% earlier today. The probability of a 50-basis-point rate hike rose from 38.5% to 61.5%. At 06:30 GMT, gold prices are trading $1765. The SPDR Gold Shares ETF (GLD) is at $164.36, down $1.06 or -0.64%.
The Fed minutes showed that the Federal Reserve would continue its aggressive hiking campaign until it can tame inflation. At the same time, Fed policymakers also indicated that it could soon slow the pace of its tightening, while also acknowledging certain weakness in parts of the economy and risk to the downside for GDP growth. This less-hawkish Fed minutes may have stopped the selling on Wednesday, setting up the possibility of a short-term retracement to the upside. However, gold traders will turn to Treasury yields and the U.S. Dollar for guidance. This could be a volatile week as yesterday’s FOMC meeting minutes, a key economic report as well as speeches from Fed officials will be closely scrutinised by investors for any further insights into what policymakers are expecting as we move towards another jumbo-sized September move. It will also be wise to keep an eye on the speeches by Kansas City Fed President Esther George and Minneapolis Fed President Neel Kashkari on Thursday. Oil prices may further come off as China’s growth fears and prospects of rising supply empowered bears. Given how Libya is pumping more oil and Iran is moving closer to restoring a nuclear deal, this could result in higher flows at a time when demand remains shaky. Both WTI and Brent remain under pressure on the daily charts with a stronger dollar seen enforcing downside pressures. The benchmarks have shed roughly six per cent this month with the current fundamental drivers opening the doors to further losses this week. If history is anything to go by, then the one thing that we do know for certain is both scenarios, whether that’s persistent Inflation or a Recession, ultimately present an extremely lucrative backdrop for commodity