Gold Technical Report: Gold bounced back from the day low and closed in green yesterday, but could not cross above 10 DMA and 50 DMA @ 1986 and 1995. However, both these averages are trading above major support at 200 DMA @ 1828 (below which the trend may turn bearish ) hence, the medium term trend looks upwards. Gold has been facing selling pressure on continuous profit booking after it made a new high around 2080 earlier this month and now almost 100 $ below the recent high. The short term Stochastics Oscillator is at 36 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 45 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices slid further yesterday, but managed to close above the support of 100 DMA @ 23.35. If this support prevails, it can again try to cross above 50 DMA @ 24.30. The medium term trend looks intact as both of these averages above 200 DMA @ 21.92. The Short term Stochastics Oscillator is at 38 and Relative Strength Index near 35.
Fundamental Report: This month of May is certainly shaping up to be an incredibly volatile month with the global banking crisis, credit crunch, escalating recession risk and America edging closer to defaulting on its debt for the first time in history, now emerging as the four biggest macro themes driving the Commodity markets. This week is all about the macroeconomics with trader’s attention firmly focused on a string of hotly anticipated data releases including the FOMC Monetary Policy Meeting Minutes, U.S PCE Inflation and GDP Data – all topped off with yet another round of “make-or-break” U.S debt ceiling talks.
The stubbornness of high inflation is dividing the Federal Reserve over how to manage interest rates in the coming months, leaving the outlook for the Fed’s policies cloudier than at any time since it began raising rates back in March 2022. Last week, a number of top Fed officials expressed the need to continue raising interest higher as ‘insurance’ against inflation. As always, the FOMC Meeting minutes will be highly scrutinized by traders for clues into the central banks future monetary policy plans. But most importantly, whether the hawkish comments recently made by several voting members of the Fed’s policy-setting committee match up with the notes from the latest Meeting Minutes or completely contradict them. Taking front and centre stage will undoubtedly be the Minutes from the Federal Reserve’s May Monetary Policy Meeting. Elsewhere, with the clock rapidly ticking on a self-imposed economic catastrophe – all eyes this week will be U.S debt ceiling talks.