Gold Technical Report: Gold prices closed in red for the fourth straight session and registered a black marubozu candle on daily charts. As 10 days Exponential Moving Average @ 1938 is poised to cross below 100 days EMA @ 1936, further downside looks possible. Main support level is near 200 days EMA @ 1872 and main resistance level is near 50 days EMA @ 1964 to trade stronger. The short term Stochastics Oscillator is at 10 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 36 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices too, closed in red for the fourth straight session and expressed weakness as it closed below 200 days EMA @ 22.42 for the first time in last 1 month. The selling pressure has increased after 10 days EMA @ 23.14 crossed below 100 days EMA @ 23.44. The Short term Stochastics Oscillator is at 6.18 and Relative Strength Index near 33..
Fundamental Report: The combination of Chairman Powell’s testimony and multiple central banks in Europe raising rates resulted in a strong decline in gold. Yesterday, The Bank of England’s Monetary Policy Committee (MPC) in a vote of seven to two voted in favor of a rate hike. Inflation is running hotter in many parts of Europe than in the United States. A report on Wednesday revealed that the CPI in the U.K. came in above expectations. Economists were expecting the headline inflation (CPI) to ease to 8.4%. Wednesday’s report revealed that inflation had come in hotter than expected at 8.7%. The BOE was not alone in its action with central banks in Norway, Switzerland, and Turkey also enacted rate hikes to slow their respective countries’ inflationary pressures.
Also, The Federal Reserve’s drumbeat signaling more rate hikes is loud enough to be heard on the other side of the world. In his second day of testimony to the House and Senate Chairman Powell is reiterating his message that a “strong majority” of Federal Reserve officials are strongly committed to raising rates twice for a total of 50 basis points by the end of the year. This would take the Fed’s benchmark Fed funds rate to a range of 5 ½% to 5 ¾%. The testimony to the Senate Banking Committee marks the third time Chairman Powell has underscored the Federal Reserve’s plan to implement two more rate hikes before the end of the year. When asked for a timeline when the Fed will raise rates again Powell responded by saying, at a “careful pace”.