Gold Technical Report: Gold prices faced selling pressure on last day of the week and closed in red. During last week, on all the 5 trading sessions, markets failed to close above 10 Day Moving Average (DMA) @ 2002. Both 10 DMA and 50 DMA @ 1921 are trading above 200 DMA @ 1800 hence, the medium term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short term Stochastics Oscillator is at 36 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 54 (it is considered overbought when above 70 and oversold when below 30) .
Silver Technical Report: The silver prices too drifted downwards as it approach 12 months high. It has a strong support near the common area of 100 DMA @ 23.08 and 50 DMA @ 22.78. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.36. The Short term Stochastics Oscillator is at 42 and Relative Strength Index near 60.
Fundamental Report: All week Federal Reserve officials have expressed a resolute narrative conveying that the need for taking interest rates higher remains. This includes an additional rate hike of ¼% in May. According to the CME’s FedWatch tool, there is an 85.7% probability that the Federal Reserve will raise rates by ¼% at the May FOMC meeting. More so there is a 25.4% probability that the Fed will raise rates again at the June FOMC meeting which would take the Fed’s terminal rate to between 5 ¼% to 5 ½%. Federal Reserve officials’ silent window started on Saturday, April 22. The blackout period will remain in effect until the May FOMC meeting has concluded, and a statement is released which will be followed by a press conference with Chairman Powell. Now another Fed official has expressed the need to continue to raise interest rates. Yesterday Federal Reserve Governor Michelle Bowman said that “more work needs to be done to tame inflation”. This is yet another Federal Reserve official that has spoken out in favor of a rate hike including New York Federal Reserve President, John Williams, Fed Governor Christopher Waller, and Federal Reserve Bank of St. Louis President James Bullard. The combination of multiple Fed officials expressing a singular narrative has finally impacted and changed the assumption by many market participants of a potential pause in rate hikes. This could be the underlying reason that gold prices broke back below $2000 per ounce.