Gold Technical Report: Gold price managed to close Monday above the 21-day Simple Moving Average (SMA) at $1,975, having dipped briefly below the latter during the day. This bullish signal seems to offer a fresh boost to Gold buyers, as they make a fresh attempt to regain the $2,000 mark.
The 14-day Relative Strength Index (RSI) is pointing north while above the midline, suggesting that there is more room for the upside. If Gold buyers find a strong foothold above the $2,000 threshold, the next resistance level could be seen at the multi-month high of $2,009 could be put to the test.
On the flip side, Gold sellers need to crack the 21-day SMA at $1,975 to initiate a meaningful downtrend toward the $1,955-$1,950 region. A sustained break below the last could threaten the 200-day SMA at $1,938. The short term Stochastics Oscillator is at 80 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 61 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also opened the week on a weaker note and registered a red candle yesterday on the back of solid rally with 3 continuous green candles last week when the prices have crossed above all 10,50,100 and 200 days Exponential Moving Average in a single day. This strength has helped silver to cross above 24.00 mark on intra day high basis. The Short term Stochastics Oscillator is at 79 and Relative Strength Index near 60.
Fundamental Report: Gold markets right now, are seeing the narrative rapidly shift away from “higher-for-longer interest rates” to “bigger-than-expected rate cuts in 2024”. As traders know – “the bigger the rate cut, the more bullish it will be for Commodity prices”. If history is anything to go by, then this new shift in narrative almost certainty sets the stage for Commodity prices to hit new record highs in the coming weeks and months ahead. According to UBS, the Fed will start cutting rates as soon as March, on the expectation that the U.S economy will slide into recession by the second quarter. This in turn will prompt the central bank to cut rates by 275 basis points next year, with the terminal rate plunging to 1.25% by early 2025.