Gold Technical Report: The gold recorded a very strong closing last Friday, to end the week with a strong Green candle. However, it witnessed some profit booking yesterday. They have also witnessed the downfall earlier for the last 2 weeks. If prices do break above the main level of $1680, the medium-term trend will turn positive. The upside resistance is at 50 DMA near 1694 on Daily charts. The short-term Stochastics Oscillator is 65 and the Relative Strength Index is 43.
Silver Technical Report: The silver prices also posted a strong green candle last Friday to close the week in the footsteps of Gold. However, it witnessed some profit booking yesterday and rested near 50 DMA at 19.10. On the downside, major support is only at 18.00, crossing below which will change the medium-term trend into negative. On the upside, a crossing of 200 DMA at 21.64 will change the main trend to positive. The Short term Stochastics Oscillator is at 71 and the RSI momentum is near 49.
Fundamental Report: The Gold prices nudged lower on Monday, weighed down by a firm dollar and elevated U.S. bond yields, while expectations of another hefty rate hike by the Federal Reserve kept investors on the sidelines. But that’s only half the story. At one point during the session, prices jumped to a 6-session high after a survey showed U.S. business activity contracted for a fourth straight month in October, the latest evidence of an economy softening in the face of high inflation and rising interest rates. Gold traders face another round of economic news on Tuesday, starting at 13:00 GMT. The U.S. housing market will be at the forefront early Tuesday with the Home Price Index (HPI) and the S&P/CS Composite-20 HPI expected to come in lower than the previous month. The housing numbers are weakening because of rapidly rising mortgage rates. The housing data will be followed by the CB Consumer Confidence and Richmond Manufacturing Index reports at 14:00 GMT. The Consumer Confidence report will be closely watched especially with the Fed scheduled to meet on November 1-2. It is expected to show a decline from 108.0 to 105.9 due to high inflation and rising interest rates. Weaker-than-expected data could help underpin gold prices since it will likely fuel speculation the Fed may slow down the pace of rate hikes.
The recent bearish market sentiment in gold has been the direct result of market participants having genuine concern about upcoming rate hikes of 75 basis points at the final two FOMC meetings this year in November and December. Comments made by multiple Federal Reserve officials have underscored their intent and focus on lowering inflation by raising interest rates. In an exclusive interview with Kathleen Hays of Bloomberg News today Federal Reserve Bank of St. Louis President James Bullard reinforced the resolve of the Federal Reserve to continue their aggressive rate hikes to curb high inflation. Amongst Federal Reserve officials James Bullard is considered to be one of the most hawkish officials. He was the first Federal Reserve President to publicly suggest rate hikes of 75 basis points. In the interview, he said that the CPI core rose to 6.6% in September year over year, which continues to be a worrisome pattern. These statements reinforced that the market sentiment yields in government debt will continue to rise.