Gold Technical Report: The gold recorded strong Green candle on Wednesday followed by a Doji candle yesterday . Today’s closing will be important from the perspective of weekly charts, especially given the fact that it witnessed the downfall earlier for last 2 weeks. The upside resistance is at 50 DMA near 1683 on Daily charts. If prices do break above this levels, the medium term trend will turn positive.The short term Stochastics Oscillator is at 74 and Relative Strength Index is at 47.
Silver Technical Report: The silver prices posted a stong green candle last Friday to close the week in footsteps with Gold. It continued the uptrend this week as the prices trade above 50 DMA at 19.08. Downside, major support is only at 18.00 , crossing below which will change the medium term trend into negative. On upside, crossing of 200 DMA at 21.60 will change the main trend to positive. The Short term Stochastics Oscillator is at 83 and RSI momentum near 54.
Fundamental Report: This will be the most recent data that the Federal Reserve will have on inflation and therefore be a key component to their sealing the fate of the size of the next rate hike at next week’s FOMC meeting. According to the CME’s FedWatch tool, there is an 88 % probability that the Federal Reserve will raise rates by 75 basis points, this is a decline from yesterday’s 92.5% probability prediction. This would take the Feds benchmark rate to between 375 and 400 basis points at next week’s Federal Open Market Committee meeting.
According to Bloomberg News economists surveyed are predicting that the PCE Index is forecast to show a 6.3% rise in September from a year ago. “Excluding food and energy, the gauge is expected to have climbed 0.5% from August and 5.2% from September 2021. The elevated projections follow government figures from earlier this month showing a key measure of core consumer prices accelerated in September to a 40-year high.” In an article penned by Jessica Menton of Bloomberg News, the most pivotal question facing investors and traders is “whether decades-high inflation is nearing a peak or if prices are going to keep rising … Traders are closely watching the Federal Reserve’s preferred measure of inflation — the personal-consumption expenditures price index — because it will help determine if the central bank moves ahead with another 75 basis-point interest-rate increase at its meeting next week.” Although her article was focused on Wall Street and stock investors her statements offer articulate insight into other asset classes including gold and silver. Thomas Martin, senior portfolio manager at Globalt Investments said, “The Fed is laying the groundwork to stop having outsized rate increases if the inflation data supports that. But if it doesn’t, they’ll be ready to continue with big hikes beyond November.”