Gold Technical Report: Gold prices, posted a green candle yesterday after declining heavily, a day before. It witnessed a renewed buying near the trendline support which acted as a resistance before this rally. Below these levels, we may see the next buying supports at the10 Day Moving Average (DMA) @1924 and 50-DMA @1884. Since both 10 DMA and 50 DMA are trading over 200 DMA @1779, 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 62 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 67 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also following suit moved up after making an intraday low near 100 DMA and 50 DMA converge point @22.25. The medium-term trend looks bullish as both of these averages are above 200 DMA @20.92. The Short term Stochastics Oscillator is at 86 and Relative Strength Index is near 64.
Fundamental Report: Gold prices increased by nearly 2% on Wednesday after the Fed raised interest rates as expected, but also hinted that it may not increase rates again soon due to the recent collapse of two U.S. banks. Gold is often considered a good investment during times of inflation and economic uncertainty. However, the Fed has made it clear that it is more focused on fighting inflation than on cutting rates, and it may raise rates further if necessary. The language used by Fed Chair Jerome Powell during his press conference was carefully watched by investors. Despite this, some analysts believe that the current economic and financial uncertainty, combined with fewer expected Fed rate hikes, will encourage more investors to consider precious metals like gold.
While many investors had hoped to hear something about a rate cut the Federal Reserve made it clear that that is not something on the table right now and we can expect to see elevated interest rates throughout the remainder of the year. The pivot was that the Federal Reserve announced that they would not continue aggressive rate hikes and that a pause of rate hikes is imminent and soon. However, this FOMC meeting had a quite different tone than expected in that they announced a pause for the first since it began an aggressive period of rate hikes in March 2022 taking the Fed funds rate from near to its current rate which is 4 ¾% to 5.00%.