Gold Technical Report: The gold prices witnessed the downfall, to continue the last week’s selloff, halted very briefly intermittently for only 2 trading days. If prices do break above the main level of $1680, the medium-term trend will turn positive. The upside resistance is at 50 DMA near 1648 on monthly charts. The short-term Stochastics Oscillator is at 15 and the Relative Strength Index is at 36.
Silver Technical Report: The silver prices were trying to rebound for the last 2 days, but yielded to selling pressure yesterday to follow in the footsteps of Gold. The next major support is only at 18.00, crossing below which will change the medium-term trend into negative. On the upside, a crossing of 200 DMA at 21.70 will change the main trend to positive. The Short term Stochastics Oscillator is at 39 and the RSI momentum is near 41.
Fundamental Report: In an exclusive interview with Kathleen Hays of Bloomberg News today Federal Reserve Bank of St. Louis President James Bullard reinforced the resolve of the Federal Reserve to continue their aggressive rate hikes to curb high inflation. James Bullard said that it is good news that markets are pricing in anticipated interest rate hikes, making it important that officials “follow through” and implement those increases to curb high inflation. He said that the Federal Reserve has continued to be surprised that inflationary pressures continue to grow confirming that the goal of the Federal Reserve is to get their fed funds rate closer to 4.5% or 4.75%. Bullard said that a 75-basis point rate hike at the November FOMC meeting “has been more or less priced into markets”. However, he added that he’d prefer to wait until the meeting to decide his preference for the size of the hike.
He did not confirm that a November 75-basis point rate hike would be followed by an additional 75- basis point rate hike in December saying that he didn’t want to “prejudge” what he would support at the December meeting. Amongst Federal Reserve officials James Bullard is considered to be one of the most hawkish officials. He was the first Federal Reserve President to publicly suggest rate hikes of 75 basis points. In the interview, he said that the CPI core rose to 6.6% in September year over year and that continues to be a worrisome pattern. These statements reinforced the market sentiment that yields in government debt will continue to rise which is exactly what we saw today. Futures on the 10-year note rose by 3.23% today yielding 4.127%, and the 30-year bond treasury yield rose by 2.61% yielding 4.126%. These higher yields in turn strengthened the dollar resulting in a 0.75% increase in the dollar index which is currently fixed at 112.835.