Gold Technical Report: Gold slipped further yesterday, as it failed to cross above 10 DMA @1985. The fact that it closed at the day low yesterday and also that the 10 DMA crossing below 50 DMA @1992 are making short term trend negative. The only good aspect being these averages are trading above major support at 200 DMA @ 1827 (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 120$ below the recent high. The short term Stochastics Oscillator is at 34 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 40 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also came down yesterday, and crossed below the support of 100 DMA @ 23.34. This level will now act as a resistance before prices move above 50 DMA @ 24.32. The medium term trend looks intact as both of these averages above 200 DMA @ 21.93. The Short term Stochastics Oscillator is at 29 and Relative Strength Index near 32.
Fundamental Report: A dovish stance by Federal Reserve members was not able to be supportive of gold pricing as the precious metal tumbled its near recent lows. Spurt in Dollar Index along with the rising yields of near term expiry T Bills are keeping a constant check on the gold prices. The Federal Reserve released the minutes from the last FOMC meeting held in May. The minutes revealed that numerous Federal Reserve officials believed the most prudent path would not contain rate hikes in the near future. That being said, Fed officials were not unified in that belief. There were Federal Reserve officials that said that because the economy has evolved as anticipated “then further policy firming after this meeting may not be needed.” The minutes also revealed that some officials of the Federal Reserve underscored the need that they should communicate that interest rate cuts were not likely this year although further hikes cannot be completely ruled out. The minutes showed that members were laser-focused on stress in the banking system and the failure of multiple banks in the United States incorporating that into their forecast and more importantly forward guidance.