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 96 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 72 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also moved up parallely and looking confident after crossing 25.00 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 May Highs of 26.00 mark as a new target. The Short term Stochastics Oscillator is at 93 and Relative Strength Index near 71.
Fundamental Report: Gold witnessed frenzied buying as a result of the continued decline of the Dollar Index and Treasury Yields. The dollar has traded to a lower high, a lower low, and a lower close for the last three consecutive trading days. Currently, the dollar is down 0.44% and the index is fixed at 102.65. Considering that the dollar index was trading above 106 on November 1, the decline in value amounts to approximately 4%. Christopher Waller, a voting member of the Federal Reserve remarked, “I am increasingly confident that policy is currently well-positioned to slow the economy and get inflation back to 2%”. Most importantly he suggested that the Fed could start lowering rates if inflation continues to decline “for several months”, adding that, “There is no reason to say we will keep it really high.” Considering that the world is facing violent conflicts in the Middle East and Ukraine, combined with Waller’s words these facts have taken gold well past the elusive and key psychological level of $2000 per ounce.