Gold Technical Report: After the continuous fall in the last week, gold prices looking to stabilize for last 2 days.As long as they trade below the main bottom at $1680. they 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 28 and RSI momentum is 35.
Silver Technical Report: Silver ended last week with a big green candle as the prices just touching down 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 68 and RSI momentum near 53.
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. Helping to put a cap on the market are higher U.S. Treasury yields and a steady U.S. Dollar. Both moves are being driven by expectations the U.S. Federal Reserve will deliver a steep interest rate hike when it meets on Tuesday and Wednesday. At 17:00 GMT, December Comex gold futures are trading $1679.90, down $3.60 or -0.21%. The SPDR Gold Shares ETF (GLD) is at $155.62, down $0.22 or -0.14%. Treasury yields climbed as traders anticipated the Federal Reserve’s next moves in the face of persistently high inflation. The benchmark 10-year Treasury yield gained 6 basis points to 3.518%, hitting its highest level since April 2011, and was last up 2 basis points to 3.467%. The yield on the 2-year Treasury bond rose 8 basis points to trade at 3.936%, trading around levels not seen since 2007. The Fed’s two-day meeting will begin Tuesday, with most market participants expecting another 75 basis point hike by the central bank. Some analysts have, however, argued the Fed could increase interest rates by a full point, or 100 basis points. 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.