Gold Technical Report: Gold prices tried to push upward yesterday after withstanding a selling bought on Friday. During the last 6 trading sessions, markets failed to close above 10 Day Moving Average (DMA) @2003. Both 10 DMA and 50 DMA @1924 are trading above 200 DMA @1801 hence, 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 40 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 53 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices remained rangebound sit finds unable to break through the parallel channel of the last 6 days. It has strong support near the common area of 100 DMA @23.10 and 50 DMA @22.85. The medium-term trend looks bullish as both of these averages are above 200 DMA @21.40. The Short term Stochastics Oscillator is at 48 and Relative Strength Index is near 63.
Fundamental Report: On Thursday the Bureau of Economic Analysis (BEA) will release the Gross Domestic Product first quarter report. An average of the current forecasts is predicting that the first quarter of GDP for 2023 will come in at 1.8%. If correct, this would indicate that the economy continues to contract from the 2.6% GDP that was reported in the fourth quarter of last year. The advance reading of the US real GDP growth, scheduled to release on Thursday, is expected, according to Bloomberg’s survey of economists, to slow to 2% Q/Q annualized in Q1, down from 2.6% in Q4 last year. Despite inventory drawdown potentially dragging GDP growth, personal consumption is expected to come in strong at 4% Q/Q annualized and be the key driving force to sustain GDP growth in Q1. This will be followed by Friday’s Personal Consumption Expenditures (PCE) index, the preferred measure of inflation and wage growth used by the Federal Reserve. Economists polled by Bloomberg are predicting a moderate forecast for the core PCE to show an increase of inflation by 0.3% MoM and 4.5% YoY. These upcoming reports and their forecasts have led investors to devalue the US dollar which in turn has added strength to gold prices. Markets further await the FOMC rate decisions on 2-3 May for price discovery and valuation guidance. According to the CME’s FedWatch tool, there is almost a certainty (91.4%) that the Federal Reserve will end next week’s meeting with the announcement of a ¼% rate hike. Also, there is a 67.9% probability that the Fed’s terminal target rate will remain between 5% and 5 ¼% with the Federal Reserve not raising rates at the June 2023 FOMC meeting.