Gold Technical Report: The gold prices are showing some signs of recovery this week from the bottom after 6 days af continuous fall last week. The medium term trend looks still bearish. Any slippage down the nearest main bottom at $1676 will turn the Main trend negative. On the upside, the immediate resistance are 50 DMA @ 1772 , last week’s high at 1808 and then 200 DMA @1838. The Short term Stochastics Oscillator is at 58 and RSI momentum is near 48.
Silver Technical Report: Silver is experiencing pullback from the bottom after last week’s continuous fall. It still looks further bearish as it is trading below both 50 DMA and 20 DMA. However, since the 20 DMA has crossed 50 DMA upwards, we can expect some technical buying. The next major resistence will be faced around 50 DMA around 19.80. The Short term Stochastics Oscillator is oversold at 38 and RSI momentum near 44.
Fundamental Report: Gold prices moved higher on Wednesday as U.S. Treasury yields test a key resistance area that could determine the direction of bullion’s next major move. Meanwhile, a potentially bearish technical pattern by the U.S. Dollar Index suggests momentum may be getting ready to shift to the downside, which could also give gold a near-term boost. However, today’s early price action is likely being fueled by position-squaring and adjusting ahead of highly anticipated speech by Federal Reserve Chairman Jerome Powell at the central bankers’ symposium at Jackson Hole, Wyoming. However, traders feel that it doesn’t represent a change in trend and avoid to take on a major position ahead of Powell. There is just too much uncertainty in the markets as to whether Powell will suggest going big with a super-sized 75-basis-point rate hike in September or if he backs a milder 50-basis-point move. At 06:30 GMT, gold is trading $1758, whereas the SPDR Gold Shares ETF (GLD) settled at $162.78, up $1.14 or +0.70%.
The current reading from the FedWatch Tool indicates the same assessment with the chances of a 50-basis-point rate hike coming in at 49.5% and the odds of a 75-basis-point rate hike sitting at 50.5%. Traders just don’t know what the Fed will do on September 21, but they do have 28 days to figure it out before the Fed makes its determination of where interest rates should be. Before that, however, policymakers will have a chance to take a look at another U.S. Non-Farm Payrolls report and fresh U.S. consumer inflation data. Powell will address a crowd of central bankers in Jackson Hole Symposium, a highly anticipated speech that could signal how high U.S. borrowing costs may go. The biggest concern for gold traders is that Powell not only delivers a hawkish message but also issues a recession warning. This would give investors two reasons to buy the U.S. Dollar. Some will buy the greenback because they are chasing the yields. Some will be attracted to its safe-haven appeal.Not only are higher Treasury yields making the dollar a more attractive investment, but increasing bets for a global recession are also driving up its safe-haven appeal. Global investors are seeking protection in the greenback for a number of reasons including Russia’s planned shutdown of a key pipeline that supplies natural gas to Germany, and China’s decision to slash its benchmark interest rate in order to stimulate a weakening economy.