Gold Technical Report: Gold slipped further but managed to find a support near 100 DMA @ 1935. Also the 10 DMA @ 1958 crossing below 50 DMA @ 1989 are making short term trend negative. The only good aspect being these averages are trading above major support at 200 DMA @ 1831 (below which the trend may turn bearish ) hence, the medium term trend looks upwards. Gold has been facing selling pressure on continuous profit booking after it made a new high around 2080 earlier this month and now almost 150 $ below the new high. The short term Stochastics Oscillator is at 12 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 36 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices managed to advance further, but hit a resitance 100 DMA @ 23.32. After clearing this level , next target stands at 50 DMA @ 24.37. The medium term trend looks intact as both of these averages above 200 DMA @ 21.98. The Short term Stochastics Oscillator is at 33 and Relative Strength Index near 36.
Fundamental Report: The Gold prices fell to 2 months low reflecting the advancement of Dollar Index which is near 2 months high @ 104.40. The golden appeal was dented by optimism over a U.S. debt ceiling deal and reduced expectations for a pause in the Federal Reserve’s rate hike policy in June. On Monday, U.S. President Joe Biden expressed confidence in the prospects of Congress passing the debt ceiling deal he reached with House of Representatives Speaker Kevin McCarthy. This development, along with the diminishing concerns over events like the U.S. regional banking crisis and the U.S. debt ceiling raise, has reduced market interest in gold as investors seek higher returns. However, Fed officials have taken a hawkish stance on interest rates in recent days. This has somewhat offset the safe-haven flows related to the U.S. debt ceiling situation, as higher interest rates diminish the appeal of zero-yield bullion. Neel Kashkari, Minneapolis Fed President, who experienced the 2008 financial crisis, now expresses worries about systemic risks and inflation as a U.S. monetary policymaker. If a more dovish approach is adopted later in the year, it would imply a potential easing of interest rates. Such a move would be seen as bullish for equities and reduce the attractiveness of holding gold compared to other riskier asset classes. Currently, the markets are pricing in a 42.7% chance of the Federal Reserve keeping rates unchanged in June.