Gold Technical Report: Gold prices tumbled further yesterday for the third straight session and closed below 50 DMA @ 1986. Gold has been facing selling pressure on continuous profit booking after it made a new high around 2080 earlier this month. It is evident from the 10 DMA @ 2001 which has started sloping downwards. The current prices are trading above major support at 200 DMA @ 1825 (below which the trend may turn bearish ) hence, the medium term trend looks upwards. The short term Stochastics Oscillator is at 12 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 41 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also declined yesterday following the suit and closed near the support of 100 DMA @ 23.35. If this support prevails, it can again try to cross above 50 DMA @ 24.17. The medium term trend looks intact as both of these averages above 200 DMA @ 21.88. The Short term Stochastics Oscillator is at 13.80 and Relative Strength Index near 38.86.
Fundamental Report: The recent comments by Federal Reserve officials indicating a more hawkish monetary policy than previously believed or anticipated. Yesterday Austen Goolsbee President of the Federal Reserve Bank of Chicago said it was, “far too premature to be talking about rate cuts”. Other Fed officials came out in favor of a more hawkish monetary policy such as Loretta Mester, President of the Cleveland Federal Bank who said, “rates were not yet at a point where it could hold steady.” Also, the economic data reveals a robust economy in the United States that is continuing to recover from the pandemic recession. Proof of that began last week when the new U.S. jobless claims came in well under expectations along with the Philadelphia Fed Manufacturing index in the U.S. which fell from -23.2 points in March to -31.3 points in April. This is the lowest number since May 2020. It also marks eight consecutive negative readings coming in well below expectations that predicted -19.2. Statements by Federal Reserve officials combined with recent solid economic data have dramatically influenced the probability of what the Federal Reserve will announce at the next FOMC meeting which will begin on June 24. Currently, the benchmark rate of the Federal Reserve is between 5 and 5 ¼%. The probability that the Federal Reserve will pause rate hikes next month has dramatically decreased from 89.3% one week ago, and 58.6% today. The probability that the Federal Reserve may raise rates by ¼% has risen from 10.7% last week to 41.4% today.