Gold Technical Report: Gold prices resumed last week’s rally and marched ahead yesterday. The rally looks confident as the 10 days Exponential Moving Average @ 1953, last week crossed above 100 DMA @ 1933 and yesterday crossed above 50 days EMA @ 1949. If these levels sustain, it will open room for further advancement upto the major psychological level of 2000. Main support level is near 200 days EMA @ 1872. The short term Stochastics Oscillator is at 90 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 63 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up following the suit. It had already hinted the potential strength while giving 2 consecutive massive upmoves last week as it had also crossed above both 50 and 100 days EMA with good volumes. It has crossed main target 25.00 yesterday on closing basis, a major psychological level for silver after almost 2 months of struggle. The main support is near 200 days EMA @ 22.56. The Short term Stochastics Oscillator is at 94 and Relative Strength Index near 68.
Fundamental Report: The US Dollar hit and bounced back from a 15-month low against a basket of currencies on Tuesday after core Retail Sales saw strong gains in June. Core sales showed resilience and increased 0.6% in June. Data for May was also revised slightly up to show core Retail Sales increasing 0.3% instead of the previously reported 0.2%. Two-year Treasury yields reversed a 9bp fall to a 2bp rise, while 2-year bund yields fell 9.4bp. Last month after 10 consecutive rate hikes at each FOMC meeting the Federal Reserve left their benchmark interest rate between 5% and 5 ¼%. Statements by Chairman Powell along with multiple Federal Reserve members underscored that this was not a signal that the Federal Reserve would mark this occasion as the beginning of a more accommodative monetary policy. Rather their remarks suggested that the pause was initiated so that the Federal Reserve could assess the effect that their 10 consecutive rate hikes have had on reducing inflation. Recent data suggests that the Fed’s action has done just that after two reports confirmed that the growth of inflation has been curtailed. According to experts, “Data Tuesday showing weaker U.S. retail sales and industrial production data further fueled expectations for an end to the Fed’s rate-hiking cycle, causing Treasury yields to fall, which in turn “helped to support low- and zero-yielding assets, like gold and silver” .