Gold Technical Report: Gold moved in a tight band with positive bias on Friday. The movement was mostly capped between 10 days and 50 days Exponential Moving Average. Recently it witnessed volatile movements when it crossed above 2100 mark upside on 4th Dec and also drifted down below 1980 on 12th Dec. The short term Stochastics Oscillator is at 34 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 47 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices witnessed selling pressure on Friday after making an intraday high near 10 days EMA. It had posted a DOJI candle on last week, signifying indecision after a good bounce back earlier, when it crossed above all 50,100 and 200 days Exponential Moving Averages on intra day high basis but could not sustain. The Short term Stochastics Oscillator is at 10 and Relative Strength Index near 33.
Fundamental Report: Gold prices closed lower last week, marking their second decline in three weeks, influenced by Federal Reserve policymakers’ cautious remarks. Federal Reserve Governor Christopher Waller’s call for a “methodical and careful” approach to rate cuts echoed sentiments from Chicago Fed President Austan Goolsbee and Atlanta Fed President Raphael Bostic. Both emphasized the need for more inflation data before considering rate adjustments, pointing towards potential delays in anticipated rate cuts and affecting investor sentiment. Also, U.S. economic reports significantly influenced the market narrative. Retail sales figures exceeded expectations, signaling a stronger economy. Additionally, weekly jobless claims reached their lowest level since September 2022, and the University of Michigan’s Consumer Sentiment Index surged to its highest point since July 2021. These indicators, combined with the Fed’s cautious rate cut approach, led to a shift in market expectations. The likelihood of a March rate cut decreased, with traders estimating about a 47% chance, down from 71% the previous week, according to CME’s Fed Watch Tool. Focus has now shifted to potential rate reductions in May or later. Global economic factors also impacted gold demand, particularly in emerging markets where currency fluctuations against the dollar affect gold’s affordability and investment appeal. The interplay of a strengthening U.S. Dollar, rising Treasury yields, and the Federal Reserve’s cautious interest rate policy is expected to continue influencing gold’s price trajectory. Investors and traders will closely monitor upcoming economic reports and Federal Reserve officials’ comments for further insights. With the U.S. economy showing resilience and the Fed maintaining a cautious policy stance, gold prices may face continued challenges in rallying in the short term.