Gold Technical Report: Gold prices, which traded continuously upwards for most of the last week, moved up further at the beginning of the session but faced profit booking at the end and closed in the red. On Friday, it zoomed up after breaking the trendline near 1938 on daily charts. Also, the metal got renewed buying support as the10 Day Moving Average (DMA) @1910 now crossed above 50 DMA @1884 now. Since both 10 DMA and 50 DMA are trading over 200 DMA @1778, the medium-term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 85 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 72 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also following the suit retraced back after making a high for the last 30 sessions, on an intra-day basis. Silver had moved up forcefully and crossed both 100 DMA and 50 DMA in a single stride on Friday. The medium-term trend looks bullish as both of these averages (currently trading around 22.25) are above 200 DMA @20.90. The Short term Stochastics Oscillator is at 85 and Relative Strength Index is near 61.
Fundamental Report: Gold prices continue to dominate market participants’ attention with strong solid gains. There is a consensus amongst analysts that the precious yellow metal will continue to track higher, but there is also a consensus that there is an extreme amount of uncertainty as to the short-term direction or price changes over the next couple of weeks. This uncertainty is based upon the upcoming FOMC decision on its next rate hike; whether it will pause, or raise rates by ¼%. Secondly, and of equal importance is the current banking crisis that has now spread globally to include Credit Suisse of Switzerland. On Sunday Credit Suisse had new ownership by rival UBS AG in an all-stock purchase priced at 3 billion francs ($3.25 billion) took ownership of Credit Suisse. Guarantees were made by the Swiss National Bank to either bank allowing them to borrow up to 100 billion francs, which is backed by a federal default guarantee. This agreement was the result of work between the Swiss National Bank and the U.S. Federal Reserve. Last week’s banking crisis in the United States and Switzerland intensified potential uncertainty and concern of contagion spreading. MarketWatch quoted a note by Otavio Marenzi, CEO of Opimas, a management consulting firm focused on global capital markets that said, “The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial center”.