Gold Technical Report: Yesterday, Gold prices moved further in the beginning but retraced from intra day high to close in red. This week, Gold continued last week’s rally confidently as the 10 days Exponential Moving Average @ 1959, last week crossed above 100 DMA @ 1938 and this week crossed above 50 days EMA @ 1948. If these levels sustain, it will open room for further advancement upto the major psychological level of 2000 and above. Main support level is near 200 days EMA @ 1875. The short term Stochastics Oscillator is at 84 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 60 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also declined due to selling pressure and look moving towards 10 days EMA @ 24.48. Recently it has moved up with strength during the double bottom formation on daily charts. It had already hinted the potential strength while giving 2 consecutive massive upmoves last week as it had also crossed above both 50 and 100 days EMA with good volumes. It has also crossed main target 25.00 this week on closing basis, a major psychological level for silver after almost 2 months of struggle. The main support is near 200 days EMA @ 22.56. The Short term Stochastics Oscillator is at 88 and Relative Strength Index near 63.
Fundamental Report: The CME’s FedWatch tool is predicting that there is a 99.8% probability that the Federal Reserve will implement a ¼% rate hike on July 26 when the next FOMC meeting concludes. It is also likely that this month’s rate hike will conclude the series of hikes by the Federal Reserve that began in March 2022. The latest CPI (Consumer Price Index) and PPI (Producer Price Index) reports indicate that inflationary pressures are diminishing and getting closer to the Federal Reserve’s target of 2%. At its highest point, the CPI was at 9.1% and has now contracted to 3% in June. This combined with a decrease of 0.2% through June in the Producer Price Index (for all goods minus food and energy). A survey conducted by the University of Michigan revealed that consumer sentiment skyrocketed to 72.6% in July 13% above sentiment in June. It is reasonable to assume that market sentiment may assume a much more bullish demeanor if it has clear knowledge that the series of rate hikes is over. More importantly, when the Federal Reserve does initiate its first rate cut which could occur as early as the first quarter of 2024 one would expect bullish market sentiment to return allowing gold to challenge the recent record highs just below $2100 per ounce.