Daily Report – 22 May 2023

22 May 2023
OTC Market Data
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Gold Technical Report: Gold prices on Friday,  tried to recover the lost ground of earleier 3 trading session and closed in green. Gold has been facing selling pressure on continuous profit booking after it made a new high around 2080 earlier this month. It is evident from the fact that prices are trading below 10 DMA @ 1998 and 50 DMA @ 1989. However, both these averages are trading above major support at 200 DMA @ 1826 (below which the trend may turn bearish ) hence, the medium term trend looks upwards. The short term Stochastics Oscillator is at 17 (it is considered overbought when above 80 and oversold  when below 20) and Relative Strength Index (RSI) is at 44 (it is considered overbought when above 70 and oversold when below 30).

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Silver Technical Report: The silver prices also moved up on Friday, following the suit and closed above the support of  100 DMA @ 23.36. If this support prevails, it can again try to cross above 50 DMA @ 24.24. The medium term trend looks intact as both of these averages above 200 DMA @ 21.89. The Short term Stochastics Oscillator is at 25 and Relative Strength Index near 39.

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Fundamental Report: The Gold moved up on Friday, recovering from earlier losses during the week. This surge was driven by concerns surrounding the stability of the banking sector. Furthermore, traders reduced their expectations for another interest rate hike following statements made by the Chairman of the U.S. Federal Reserve. On Friday, Gold settled around $1977, up almost 20 $ or +1%. The SPDR Gold Shares ETF finished at $183.63, up $1.79 or +0.98%. Gold prices responded more positively to remarks from Janet Yellen, the U.S. Treasury Secretary, compared to the cautious statements made by Fed Chair Jerome Powell. This suggests that the upcoming meeting in June may not witness any significant changes unless there is particularly troubling economic data in the next few weeks.Reports emerged that Janet Yellen conveyed to bank CEOs the possibility of more mergers as a response to recent bank failures. This news caused concern among traders, leading to a 2.2% decline in the KBW Regional Banking Index. Stocks of PacWest Bancorp and Western Alliance experienced the most significant losses, falling by 1.9% and 2.4%, respectively. Other regional banks like Comerica Inc, Zions Bancorp, and Valley National Bancorp also saw declines. The regional bank crisis has been partially attributed to the aggressive interest rates implemented by the U.S. Federal Reserve, which compelled some lenders to seek additional capital due to a decrease in the value of interest rate-linked assets.


Jerome Powell, the Fed Chair, expressed uncertainty about the necessity of further interest rate increases. Powell highlighted previous rate hikes’ impact on borrowing costs, suggesting relief from banking sector issues for rate adjustments. Tightening credit conditions imply less upward adjustment of the policy rate than anticipated to achieve desired goals. Powell emphasized the need for careful assessment based on evolving economic data and outlook before deciding on additional policy firming. The U.S. federal debt ceiling has become a point of contention between U.S. House Republicans and President Joe Biden’s Democratic administration. The two parties paused talks on raising the debt ceiling, creating uncertainty in the market. However, there is still a possibility of reaching an agreement if both parties negotiate in good faith. The debt ceiling dispute has negatively impacted market sentiment, including regional bank stocks. A potential U.S. debt default could even force the central bank to take emergency measures to alleviate the burden on the economy.

Key US Economic Reports & Events
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