Gold Technical Report: The gold prices dropped on Friday last week and reumed the new week on same note. The medium term trend looks further bearish. Any slippage down the nearest main bottom at $1680 will turn the Main trend negative. On the upside, the major resistance will be at 50 DMA @ 1763 . The Short term Stochastics Oscillator is at 36 and RSI momentum is near 38.
Silver Technical Report: Silver is experiencing heavy selling after the pullback last week. It still looks further bearish as 20 DMA is about to cross below 200 DMA on weekly charts. The next major resistence will be faced around 50 DMA around 19.68. The Short term Stochastics Oscillator is at 30 and RSI momentum near 35.
Fundamental Report: Gold prices are edging lower on Monday, weighed down by higher Treasury yields and a stronger U.S. Dollar. The catalysts behind the moves are hawkish comments from Federal Reserve Chair Jerome Powell, who on Friday, signaled continuing with an aggressive monetary policy to tame inflation. At 07:00 GMT, gold futures is trading $1724.60. On Friday, the SPDR Gold Shares ETF (GLD) settled at $161.81, down $1.94 or -1.19%. In a highly anticipated speech on Friday at the top central bankers’ conference on Friday, Powell said the Federal Reserve will raise rates as high as needed to restrict growth, and would keep them there “for some time” to bring down inflation. He also acknowledged this could bring some pain to households and businesses. Gold investors reacted in an orderly fashion to Powell’s remarks since he delivered it with clarity and conviction. This was reassuring. Furthermore, it was hawkish enough and in line with the recent comments from other Fed officials.
In his speech, he said, “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.” He reinforced the Federal Reserve’s commitment to attempt to restore inflation to its 2% target saying that the central bank’s “overarching focus right now”. Although he went to his go-to playbook which is to be noncommittal in terms of specifics of how large the next rate hike will be at the September FOMC meeting he did not mince his words when he said that another “unusually” large increase in the benchmark lending rate could be appropriate when officials gather next month. According to the CME’s FedWatch tool, there is a 60.5% probability that fed funds rates will move to 300 to 325 basis points at the next FOMC meeting. This would mean that the Federal Reserve will have raised rates by 75 basis points over the three consecutive Federal Open Market Committee meetings.