Gold Technical Report: Gold inched up further yesterday after a quick bounce back from the support at 10 DMA around 1910 on an intraday low basis. The rally looks stronger as it has convincingly surpassed the important psychological 1900 mark a second time. The golden crossover of 50DMA @1817 over 200 DMA @1775 earlier this month has boosted the rally so far. The Medium term support stands at 200 DMA below which the trend may turn bearish. The short-term Stochastics Oscillator is at 83 and Relative Strength Index is at 71.
Silver Technical Report: The silver prices, witnessed a strong selloff yesterday but managed to find support near 50 DMA. The medium-term trend looks up as the prices continue to trade above 50 DMA @22.95. As 50 DMA has crossed above 200 DMA @ 21.01 on daily charts, gives an indication of Buy on Dip. The Short term Stochastics Oscillator is at 48 and the RSI momentum is near 51.
Fundamental Report: Next week, the Federal Reserve will hold the first federal Open Market Committee meeting for the year where they will most likely implement the next interest rate hike. Last week, we received a series of mixed messages from different Federal Reserve officials. James Bullard, the president of the St. Louis Federal Reserve for example expressed the need for the Federal Reserve to rapidly move to their target rate of 5% or higher. However, it is still highly anticipated that the Federal Reserve will continue with a slower pace of rate hikes as seen at the last FOMC meeting in December when the Fed raised rates by ¼%, the smallest interest rate hike since March of last year. Several officials of the Federal Reserve have alluded to slowing the pace of rate hikes including Gov. Christopher Waller, who said in a speech at the Council on foreign relations that he favors a ¼% rate hike at the next FOMC meeting. This is in alignment with the CME’s FedWatch tool which is predicting a 99.1% probability that the outcome of next week’s FOMC meeting will be a rate hike of 25-BPS, and only a 0.9% probability that the Fed will enact a more aggressive stance raising rates by 50-BPS. Another important report that will occur before the FOMC meeting is the release of the US core PCE (Personal Consumption Expenditures Price Index) index on January 27. The last report came in at 4.7% for November and it is currently believed that this month’s report will show that inflation has subsided to 4.4% in December of last year.