Gold Technical Report: After the massive fall on last week, gold prices tried to stabilize on Monday but yesterday again the yielded to selling pressure As long as they trade below the main level of $1680, they poses the risk of the main trend turning negative. We may expect some pullback towards 200 DMA on weekly charts.On the upside, the next major resistance will be at 50 DMA @ 1726. The Short term Stochastics Oscillator is at 7 and RSI momentum is 28.
Silver Technical Report: Silver resumed downtrend after yesterday’s DOJI candle.The next major resistence will be faced around 18.85 at 20 PMA and 19.25 at 50 PMA. The Short term Stochastics Oscillator is at 2 and RSI momentum near 39.
Fundamental Report: The Gold tried recovering nicely on Tuesday after hitting its lowest level in more than 2-1/2 years the previous session. A dip in U.S. Treasury yields and a slight pullback in the U.S. Dollar are helping to alleviate some of the downside pressure on the precious metal that is being fueled by expectations for aggressive U.S. Federal Reserve rate hikes. The SPDR Gold Shares ETF (GLD) is at $152.46, up $1.23 or +0.81%. Treasury yields fell across the board on Tuesday, with the yield on the 2-year and 10-year notes coming off recent highs. That is helping to underpin gold prices, but should in no way be construed as the start of a change in trend. With last week’s Fed rate hike “old news”, the quiet period for Federal Reserve speaker commentary has been lifted. On Monday, a number of Fed speakers reiterated that driving down persistent inflation was a top priority. Cleveland Fed president said that “aggressive and pre-emptive action can prevent the worst-case outcomes from actually coming out.” In economic news on Tuesday, U.S. Durable Goods Orders came in lower than expected, but Consumer Confidence surprisingly jumped to 108.0, better than the 104.0 forecast. In other news, the Home Price Index (HPI) fell 0.6% and the S&P/CS Composite-20 HPI came in at 16.1%, lower than expected. However, New Home Sales came in at 685K units versus a 500K unit estimate.
In one of the most sudden shifts in global economic policymaking seen in decades, central bankers launch a co-ordinated assault on inflation – delivering an historic tally of interest-rate hikes totalling more than “700 basis-points combined”, within a single week. Perhaps the most important take away from this round of rate hikes – was the “like for like” economic projections put out by the Fed and its global peers – stating that “inflation is likely to accelerate further before it begins to moderate”. The hard fact is that as long as we have interest rates below the inflation rate, even if they’re higher, they’re still negative – and negative interest rates put upward pressure on inflation. Ultimately, you can’t fight inflation with negative interest rates. That’s like trying to put out a fire with gasoline. Surprisingly, this is something central bankers still don’t seem to have figured out, which is leaving them spinning their wheels and hardly even getting close to bending the curve on inflation.