Daily Report – 31 August 2022

31 August 2022
OTC Market Data
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Gold Technical Report: The gold prices came down on selling pressure yesterday. 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 @ 1758 . The Short term Stochastics Oscillator is at 16 and RSI momentum is near 36.

Support 3
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Support 1
Current Market Price
Resistance 1
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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 19.68. The Short term Stochastics Oscillator is at 11 and RSI momentum near 33.

Support 3
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Support 1
Current Market Price
Resistance 1
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Resistance 3

Fundamental Report: Gold prices are under pressure late in the session on Tuesday as traders continue to brace for a long period of high interest rates in the United States and around the world. After Fed Chair Powell on Friday signaled the need for a more aggressive central bank, gold has been under pressure. The problems are rising rates mean lower demand for non-interest bearish gold and a stronger U.S. Dollar means a drop in demand from holders of foreign currencies. At 18:00 GMT, December Comex gold futures are trading $1737.10, down $12.60 or -0.72%. The SPDR Gold Shares ETF (GLD) is at $160.53, down $1.33 or -0.82%. U.S. economic data also weighed on gold prices today. U.S. job openings increased in July and data for the prior month was revised sharply higher, pointing to persistently strong demand for labor that is giving the Federal Reserve the greenlight to maintain its aggressive interest rate increases. Hawkish comments from a Fed official also supported higher yields. The latest remarks came from New York Fed President John Williams on Tuesday. “I do think with demand far exceeding supply, we do need to get real interest rates…above zero. We need to have somewhat restrictive policy to slow demand, and we’re not there yet,” Williams told the Wall Street Journal.  “We’re still quite a ways from that,’ he added.

In essence, the primary message that Chairman Powell delivered on Friday was that the Federal Reserve will continue to raise rates to reduce inflation “until the job is done”. This idea still lingers in the forefront of market participants’ minds. Yesterday gold futures traded to a low of $1731.80 but quickly recovered as market participants bought the dip. Yesterday gold closed at $1750 almost $20 above yesterday’s low. That is dramatically different from what we are witnessing in trading today. Gold futures are only a few dollars above today’s low which is $1732.90. Although gold’s price range contained a lower high and higher low than yesterday the price decline from open to close is noticeably different. According to the CME’s FedWatch tool, there is a 68.5% probability that the Federal Reserve will raise rates by 75 basis points during the September FOMC meeting. Although it is a slight decline from yesterday’s probability assessment which predicted a 75% probability of a 75-basis point rate hike in September, one week ago the FedWatch tool was predicting a 47.4% probability.

Key US Economic Reports & Events
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