Gold Technical Report: Gold prices had started giving bullish hints in the latter part of last week amidst the thin trading due to the festive season. It extends the rally further today after a gap of 3 days. It has already recorded an intraday high in the last 6 months and has strong support at 200 DMA at 1780. The rally may continue as it has overcome the important psychological 1800 mark. The Medium term support stands at 50 DMA @1750 below which the trend may turn bearish. The short-term Stochastics Oscillator is at 78 and the Relative Strength Index is at 64.
Silver Technical Report: The silver prices, parallel with gold prices played rangebound with an upward bias last week. The medium-term trend looks up as the prices continue to trade above 200 DMA @21.12. As 50 DMA @21.87 has crossed above 200 DMA on daily charts, further fire-up in the rally is expected. The Short term Stochastics Oscillator is at 72 and the RSI momentum is near 64.
Fundamental Report: That was an especially intense year, and precious metals held on tight. If 2023 is even more intense than 2022, precious metals won’t have a choice but to rally. A lot has happened this year. Russia invaded Ukraine. North Korea fired off missile after missile. Latin America turned to the left. The United Kingdom lost a queen, gained a king, and saw three Prime Ministers in Downing Street. President Xi Jinping was re-elected for an unprecedented third term as the General Secretary of the Communist Party of China, cementing his grip on power. Protests have been raging across Iran. The demand-side improvement in the last quarter of 2022 supports gold prices recovery from the loss of a healthy demand seen in Asian Countries, and stronger consumer and central bank buying helped year-to-date demand recover to pre-COVID level. Focusing on economics, inflation soared to 9%, while the central bank hiked interest rates. Even the ECB joined the hawkish club. In particular, the Fed aggressively raised the federal funds rate by more than 4 percentage points to 4.52-4.50%. Consequently, the bond yields and the U.S. dollar soared, while the cryptocurrencies imploded. The American stock market entered a bear market. The global economy is at an inflection point after being hit by various shocks over the past year. The biggest was induced by central banks as they stepped up their aggressive fight against inflation and it will likely continue for the first half of next year but at a slower pace which is supporting gold prices. After strengthening for nearly two years straight, the US dollar has recently seen a steep drop, which is favorable to gold prices. Technically, Dollar and US bond yield is topped out and the correction trend will continue in both. Importantly, given the economic slowdown, the U.S. central bank won’t be as hawkish as in 2022. It could pivot and start to cut interest rates in 2023, especially since the American labor market is not as good as it seems at first glance. We wish all the investors fulfillment of their dreams, successful transactions, and financial abundance in the new year of 2023!