Gold Technical Report: Gold medium term trend is looking flat in the beginning of new week. However slippage down the nearest main bottom at $1786 will reaffirm the downtrend. On the upside, the immediate resistance is the 50 DMA zone at $1869. A trade through $1869 will change the main trend to up. Short term Stochastics Oscillator is pointing down at 53 and RSI momentum is flat but poised just below midline at 46.
Silver Technical Report: Silver medium term trend is looking flat. However slippage down the main bottom at $ 21.32 will reaffirm the downtrend. On the upside, the immediate resistance is the 10 DMA zone at $21.60. A trade through 50 DMA $22.50 will change the main trend to up. Short term Stochastics Oscillator is overbought at 66 signalling possible small profit booking.
Fundamental Report: The Gold futures are trading flat on Monday on low volume. Due to a U.S. bank holiday, the Treasury market is closed and many of the major banks and institutions are sitting on the sidelines, leading to an early lackluster trade. A weaker U.S. Dollar, however, is helping to underpin the market. At 11:48 GMT, August Comex gold is trading $1840.80, up $0.20 or +0.01%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $171.26, down $1.43 or -0.83%. Fundamentally speaking, worries about a global recession due to aggressive rate hikes from several major central is providing some support. However, there is just not enough evidence in the economic reports to say a recession is imminent. Nor is there enough weakness to encourage the central bank to pull in the reins on future aggressive rate hikes. The current price action and the mixed fundamentals are likely to hold gold in a short-term range. That’s just another way of saying traders are waiting for the next catalyst to drive the price action
Gold prices Consolidate over Juneteenth US Bank Holiday as The U.S. bond market and U.S. futures markets were closed on Monday. Bullion prices traded sideways. The dollar eased, but the market had little direction as both the bond and commodity futures markets were closed due to the Juneteenth Holiday. The movement of the yellow metal will be based on the dollar, which might have peaked, given the massive amount of rate hikes already built into the interest rate futures market. Gold is quoted in dollars, and the lack of movement in the greenback led to a directionless yellow metal. The most important news last week seemed to be central bank activity. Despite rate hikes from the Swiss National Bank and the Bank of England, The Bank of Japan bought a huge amount of Japanese government bonds last week to defend its 0.25% cap on the 10-year. The move by the BOJ was a stimulus and added $81 billion of bonds to its balance sheet. The Swiss National Bank hiked interest rates by 50 basis points, pushing the Franc up by 2% against the greenback.
With the major economic reports out of the way, Federal Reserve speakers are likely to be the source of volatility this week. Over the week-end, Fed Governor Christopher Wallers issued a few hawkish remarks. Waller on Saturday became the latest U.S. central banker to pledge a whatever-it-takes approach to fight inflation, days after the Fed raised interest rates by 75 basis points and signaled more hikes to come. Wallers’ remarks echoed similar statements from Federal Reserve Chairman Jerome Powell on Friday. The key report this week, is Friday’s University of Michigan Sentiment Index. It is expected to come in at an extremely low 50.2, matching an earlier estimate. The rest of the week is filled with Federal Reserve speakers including St. Louis Fed President James Bullard at 16:45 GMT later today. The highlight of the week is likely Fed Chair Jerome Powell’s testimony on monetary policy to the Senate Banking Committee on Wednesday and to the House Financial Services Committee on Thursday.