Gold Technical Report: Gold prices moved further up on Friday registering a green candle on second consecutive day as it reclaimed the psychological mark of 2000 and also the 100 days Exponential Moving Average @ 2004. The recent swings are contained in the range recorded by extreme points 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 34 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 49 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up parallely as the rally continued for third straight session, crossing above 200 days EMA for the first time in last 36 days. The recent upmoves were capped around 23.40 where all 50,100 and 200 days Exponential Moving Averages are clustering. The Short term Stochastics Oscillator is at 78 and Relative Strength Index near 53.
Fundamental Report: The Gold prices, last week, responded to several U.S. economic reports, including the Consumer Price Index , retail sales, and the Producer Price Index . These reports had varied impacts on the probability of a Federal Reserve rate reduction, affecting Treasury yields, the US Dollar, and dollar-denominated gold. Changes in gold prices was largely due to strong inflation data, which reduced the likelihood of a near-term rate cut by the Federal Reserve. The dollar index rose over the week, and the benchmark 10-year Treasury yield also increased, reducing gold’s appeal. Reports showed an unexpected rise in U.S. producer prices in January, reinforcing the expectation of continued high-interest rates. Although gold is typically seen as a protection against inflation, the prospect of higher rates reduces its appeal, as gold does not yield interest. U.S. economic growth remains strong, indicating ongoing inflation, which is a challenging factor for gold. Market expectations for a U.S. interest rate reduction have shifted from March to June, with a 73% likelihood of a cut in June, according to the CME Fed Watch Tool.