Gold Technical Report: Gold moved up yesterday with strong buying. The prices remained buoyant throughout last week continuing the trend of earlier week. It has maintained the support of 10 days Exponential Moving Average and have crossed above the 2000 mark convincingly. The short term Stochastics Oscillator is at 95 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 65 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up parallel and looking confident after crossing 24.00 mark. Near the day high it witnessed profit booking but managed to close above 10 days Exponential Moving Average. If this strength persists, it can try to reach Aug Highs of 25.00 mark as a new target. The Short term Stochastics Oscillator is at 89 and Relative Strength Index near 68.
Fundamental Report: Gold prices reached a six-month peak on Monday, driven by a weakening U.S. dollar and expectations that the Federal Reserve might halt its interest rate hikes. The softening U.S. dollar, influenced by recent economic data, has been a key factor propelling gold’s ascent. This week’s U.S. economic releases, particularly regarding growth and inflation, could further impact gold’s stability above the $2,000 mark. Additionally, the dollar index, slightly recovering but poised for a significant monthly loss, influences gold’s pricing for international buyers. Global economic events, including the postponed OPEC+ meeting, inflation data from the euro zone and Australia, and policy decisions from the Reserve Bank of New Zealand and China’s PMI data, are poised to shape market sentiment. Investors are closely watching U.S. core PCE prices, the Federal Reserve’s preferred inflation metric, for hints on future policy direction. Despite no immediate signs of rate cuts from the Federal Reserve, market pricing suggests a growing anticipation of policy easing in the near future. The possibility of a Fed rate reduction as early as next March currently stands at around 23%. Meanwhile, U.S. Treasury yields saw an uptick, and the upcoming U.S. GDP figures and PCE price index will be closely scrutinized for further indications of the economic trajectory. The market largely expects the Fed to maintain current interest rates in December, with increasing speculation about a potential rate cut by May next year. This environment, where lower interest rates reduce the opportunity cost of holding gold, might continue to bolster gold prices in the short term.