Gold Technical Report: Gold prices declined further slightly and closed near 10 days Exponential Moving Average @ 1957. Although in the first half of the month it displayed strength as it crossed above 100 DMA @ 1938 and then again, the 50 days EMA @ 1951. If these levels sustain, it will open room for further advancement upto the major psychological level of 2000 and above. Main support level is near 200 days EMA @ 1875. The short term Stochastics Oscillator is at 65 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 54 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also declined for third straight day and moved towards 10 days Exponential Moving Average @ 24.43. Recently it has moved up with strength during the double bottom formation on daily charts, giving 2 consecutive massive upmoves as it crossed above both 50 and 100 days EMA with good volumes. It has also crossed main target 25.00 this week on closing basis, a major psychological level for silver after almost 2 months of struggle. The primary trend support is near 200 days EMA @ 22.58. The Short term Stochastics Oscillator is at 72 and Relative Strength Index near 58.
Fundamental Report: This week, central banks around the world are scheduled to announce their decisions on interest rates. Notably, the Federal Reserve, European Central Bank (ECB), and Bank of Japan will make their announcements within a 48-hour period between Wednesday and Friday. While markets have already priced in quarter-point hikes from the Fed and ECB, the focus will be on the statements made by Fed Chair Jerome Powell and ECB President Christine Lagarde about future monetary policies. Any hints of a more hawkish stance could lead to higher interest rates, increasing the opportunity cost of holding non-yielding bullion like gold. The demand and supply dynamics play a crucial role in determining its price. Physical gold demand in India saw a stall in the week ending July 21, while in China, bullion was sold at high premiums. These regional demand variations could impact gold prices, especially considering India and China are significant consumers of the precious metal. Finally, the holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased slightly by 0.57% on July 21. Such changes in gold-backed ETF holdings can reflect investor sentiment towards the metal and might influence market sentiment and short-term price movements. In conclusion, gold prices this week are likely to be influenced by a combination of factors, including the strength of the dollar, central banks’ decisions on interest rates, potential stimulus measures in China, regional demand variations, and movements in gold-backed ETF holdings. As these factors interplay, investors will keep a close eye on the precious metal’s performance and make strategic decisions accordingly.