Daily Report – 26 April 2023

26 April 2023
OTC Market Data
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Gold Technical Report: Gold prices moved ahead yesterday continuingTuesday’s trend but halted at the same spot. During last 7 trading sessions, markets failed to close above 10 Day Moving Average (DMA) @ 2000. Both 10 DMA and 50 DMA @ 1927 are trading above 200 DMA @ 1803 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 48 (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) .

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Silver Technical Report: The silver prices drifted slightly as it finds difficult to breakthrough the parallel channel of last 7 days. It has a strong support near the common area of 100 DMA @ 23.12 and 50 DMA @ 22.91. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.43. The Short term Stochastics Oscillator is at 52 and Relative Strength Index near 61.

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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 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.

In a prepared speech to the Sacramento Metropolitan Chamber of Commerce today, U.S. Treasury Secretary Janet Yellen warned of the potential for severe economic consequences if the House does not address and raise the debt ceiling. “It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security,” The debt ceiling is an upper limit set on the amount of money that the government may borrow. On January 19, 2023, the U.S. government officially hit the debt ceiling of $31.4 trillion. U.S. Treasury Secretary Yellen immediately implemented extraordinary measures to prevent the United States from defaulting such as suspending any new investments of retirement funds from government employees. The debt ceiling has been modified 20 times since 2002.

Key US Economic Reports & Events
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