Gold Technical Report: Last week, Gold prices closed in red for the first four sessions but showed some strength on Friday. It reached 100 days Exponential Moving Average @ 1937 at intra day high and corrected due to profit booking on close. Main support level is near 200 days EMA @ 1868 and main resistance level is near 50 days EMA @ 1958 to trade stronger. The short term Stochastics Oscillator is at 10 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 39 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices too, closed in red for the first four sessions but showed some strength on Friday. It has closed above 200 days EMA @ 22.40 and now immediate target level looks 10 days EMA @ 23.08. The Short term Stochastics Oscillator is at 6.18 and Relative Strength Index near 33..
Fundamental Report: Many of the biggest Central Banks have been busy making borrowing rates tighter for over a year now, and inflation has finally started to shift in the right direction for much of the world that was previously struggling to get it under control. According to economists, the deceleration of inflation rates will not result in immediate alleviation for consumers due to the persistence of elevated prices in some areas, such as the service industry. There is a prevalent belief that the price level in many industries has undergone a permanent alteration, and unless there is a matching increase in wages to offset inflation, the adverse effects for consumers will hang around for a while to come. As we saw last week, combination of Chairman Powell’s testimony and multiple central banks in Europe raising rates resulted in a strong decline in gold. The Bank of England’s Monetary Policy Committee (MPC) in a vote of seven to two voted in favor of a rate hike. Inflation is running hotter in many parts of Europe than in the United States. A report on Wednesday revealed that the CPI in the U.K. came in above expectations. Economists were expecting the headline inflation (CPI) to ease to 8.4%. Wednesday’s report revealed that inflation had come in hotter than expected at 8.7%. The BOE was not alone in its action with central banks in Norway, Switzerland, and Turkey also enacted rate hikes to slow their respective countries’ inflationary pressures. Also, The Federal Reserve’s drumbeat signaling more rate hikes is loud enough to be heard on the other side of the world. In his second day of testimony to the House and Senate Chairman Powell is reiterating his message that a “strong majority” of Federal Reserve officials are strongly committed to raising rates twice for a total of 50 basis points by the end of the year. This would take the Fed’s benchmark Fed funds rate to a range of 5 ½% to 5 ¾%. The testimony to the Senate Banking Committee marks the third time Chairman Powell has underscored the Federal Reserve’s plan to implement two more rate hikes before the end of the year at a “careful pace”.