Gold Technical Report: Gold prices played rangebound yesterday and registered a red DOJI. However, they managed to close above 200 DMA in 1784. The next target remains the psychological 1800 mark. The Medium term support stands at 50 DMA @1724 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 33 and the Relative Strength Index is at 56.
Silver Technical Report: The silver prices, have been trading rangebound for the last 3 days after a downfall last week. The medium-term trend looks up as the prices continue to trade above 200 DMA @ 21.18. On the downside, major support is only at 50 DMA @21.03, crossing below which may change the medium-term trend into negative. The Short term Stochastics Oscillator is at 32 and the RSI momentum is near 57.
Fundamental Report: Gold began the trading week moving lower as market participants continue to digest and react to last week’s FOMC statement and economic projections. In essence, the Federal Reserve made it clear that they are committed to reducing inflationary pressures by continuing to implement rate hikes and then maintaining those elevated rates throughout the next year. According to Bill Dudley, a former President of the Federal Reserve Bank of New York, last week’s FOMC reconfirmed the commitment of the Fed to take inflation to its target level of 2%. The message from last week’s policy-making meeting was almost entirely hawkish. The Fed’s statement retained the language of “ongoing increases,” suggesting several more interest-rate hikes. Officials projected a higher-than-expected peak rate of at least 5% to 5.25% (with greater unanimity), higher inflation for longer, lower output growth, and higher unemployment. Yet despite the Fed’s clear warnings of more tightening to come, investors aren’t getting the message. Futures markets still suggest a peak federal funds rate of less than 5%, about 20 basis points lower than the Fed’s projections, with rate cuts beginning next summer. Unfortunately, this optimism has a downside: It means that the Fed will have to work harder, tightening monetary policy more than it otherwise would, to achieve its 2% inflation objective.