Gold Technical Report: After the continuous fall the gold prices ended the week on a green candle.The slippage down the main bottom at $1676 poses the risk of the main trend turning negative. We may expect some bounceback here as prices near 200 DMA on weekly charts.On the upside, the next resistance will be at 50 DMA @ 1735. The Short term Stochastics Oscillator is at 15 and RSI momentum is 33.
Silver Technical Report: Silver ended the week with a big green candle as the prices just touching and then bouncing back from 20 DMA with reversal signs.The next major resistence will be faced around 20.21 wich is a triple support in mid-August. The Short term Stochastics Oscillator is at 52 and RSI momentum near 50.
Fundamental Report: Gold prices traded lower last week neaing towards a more than two year low as expectations of aggressive rate hikes by the U.S. Federal Reserve lifted U.S. Treasury yields, while keeping the U.S. Dollar within striking distance of a 24-month high. At 06:40 GMT, Gold is trading $1665, down $10.00.The SPDR Gold Shares ETF (GLD) settled at $154.98, down $2.95 or -1.87%. The market is being pressured by increased prospects of more aggressive rate hikes by the Federal Reserve and a stronger U.S. Dollar. Currently, the FedWatch Tool is calling for a rate hike of 75 to 100 basis points at next week’s central bank policy meeting. The SPDR Gold Shares ETF (GLD) settled at $157.92, down $0.62 or -0.39%. Ahead of today’s New York trading session, short-term U.S. Treasury yields continued to rise as investors weighted the prospect of larger rate hikes from the Federal Reserve at its September 20-21 meeting. The yield on the 2-year Treasury, which is among those most affected by Fed decisions, rose 4 basis points to 3.823%, its highest level since 2007. Over the last six months, monetary policies of the Federal Reserve have had a minimal to almost nonexistent effect taking inflation from 9.5% in June to 8.3% in August. Reducing inflation by only 1.2% in six months cannot be considered successful. Ask any middle-class American if they feel like they have seen some monetary relief as inflation has moved down by just over percent. It seems highly unlikely. On multiple occasions throughout history Chairmen of the Federal Reserve have had to resolve and reduce high inflation. Paul Volcker, Alan Greenspan, and Ben Bernanke all were burdened with this issue. These Federal Reserve Chairman all took an exceedingly aggressive stance to tackle the problem. Volcker, Greenspan, and Bernanke accomplished this task by moving interest rates above the level of inflation. The path of the current Federal Reserve assumes that they can try something different and still accomplish their intended goal of moving inflation back to 2%. However, the ugly truth is that much more rate hikes are needed and rates will have to remain elevated for a lot longer than most people realize to have any dramatic effect on lowering inflation levels.