Gold Technical Report: Gold slipped lower yesterday for the second consecutive day as the market seems to be factoring in the nervousness from heavy selling shock on 2 consecutive days at the start of the month when it shed almost 100 Dollars. It’s also clear that the 10 DMA @1842 has crossed below the 50 DMA @1864. But since 50 DMA is trading over 200 DMA @1775, 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 36 and Relative Strength Index is at 38.
Silver Technical Report: The silver prices faced selling pressure yesterday after a short rally for the earlier three consecutive days and closed below the 100 DMA @21.93. The medium-term trend can be considered up only if the prices move above 100 DMA. As 50 DMA @23.21 trades above 200 DMA @20.98 on daily charts, gives an indication of Buy on Dip. The Short term Stochastics Oscillator is at 65 and the RSI momentum is near 35.
Fundamental Report: The FOMC minutes revealed that Federal Reserve members almost unanimously anticipate that it is appropriate to raise its Fed funds rate by 25 basis points at the next FOMC meeting scheduled to be held in March, although two officials favored a larger 50 basis point hike. According to Bloomberg News, “US central bankers raised interest rates by a quarter-point, moderating their action after a half-point hike in December and four consecutive jumbo-sized 75 basis-point increases. The move lifted the benchmark policy rate into a range of 4.5% to 4.75%. Both Chair Jerome Powell and the minutes indicated that officials are prepared to raise rates further to produce a broader slowdown in the economy that tamps down inflation.” The Federal Reserve will continue and implement “more” rate hikes until “inflation is clearly on a path towards 2%.” The Fed’s hawkish monetary policy seeks to raise its benchmark Fed funds rate to a target just above 5%, and keep that rate elevated until incoming data provide confidence that inflation is on a sustained downward path to 2%. “Market participants interpreted incoming data as pointing to moderating inflation risks. Against this backdrop, market participants judged that the FOMC would likely slow the pace of rate increases further at the current meeting, and respondents to the Desk’s Survey of Primary Dealers and Survey of Market Participants widely expected the Committee to implement a ¼ percentage point increase in the target range for the federal funds rate.”