Gold Technical Report: The gold prices posted a DOJI candle yesterday showing indecisiveness. The medium term trend looks further bearish as prices continue to trade below 50 DMA which itself is trading below 200 DMA. 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 @ 1762 . The Short term Stochastics Oscillator is at 33 and RSI momentum is near 40.
Silver Technical Report: Silver witnessed continued selling pressure after the attempted 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 19.71. The Short term Stochastics Oscillator is at 25 and RSI momentum near 36.
Fundamental Report: Powell’s resolute keynote speech on Friday shook the financial markets to their core. The effect that Chairman Powell had when he rebuffed expectations of the Fed’s tempered monetary policy was strong. His message underscored that the Federal Reserve will continue its hawkish monetary policy and keep raising interest rates in its fight against the spiraling level of inflation. “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.” 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.