Gold Technical Report: Gold prices attempted to stabilize yesterday after the heavy fall on Friday and also managed to close above 10 DMA @ 2011. The selloff started last week when the new highs around 2080 attracted profit booking. Both 10 DMA and 50 DMA @ 1957 are trading above 200 DMA @ 1816 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 50 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 57 (it is considered overbought when above 70 and oversold when below 30)
Silver Technical Report: The silver prices remained rangebound, continuing Friday’s bearish mood which reversed the earlier 3 days’ winning streak. It has a strong support near the common region around 23.32/23.64 of 100 DMA and 50 DMA are meeting. The medium term trend looks bullish as both of these averages above 200 DMA @ 21.72. The Short term Stochastics Oscillator is at 73 and Relative Strength Index near 62.
Fundamental Report: Gold traders are keeping an eye on the upcoming April U.S. consumer price index, which is a widely watched measure of inflation. According to economists polled by Dow Jones, they expect CPI to have risen 5% last month compared to the same time last year. They also predict a month-over-month gain of 0.4%. Investors will analyze the report for any indications on future Federal Reserve policy moves. Currently, traders are only predicting a 13.1% chance of another 25 basis-point rate hike next month, according to the CME Group’s FedWatch tool. On Friday, yields increased following stronger-than-expected job growth in April. The Bureau of Labor Statistics reported 253,000 nonfarm payrolls were added, exceeding the anticipated 180,000 by Wall Street. The unemployment rate was also below expectations at 3.4%, making it less likely that the Federal Reserve will stop its aggressive tightening campaign. This policy shift is something that many on Wall Street had been hoping for. Last week, prices tumbled as the U.S. Labor Department released the nonfarm payroll jobs report which revealed that the labor market is robust as well as resilient considering the massive campaign by the Federal Reserve to slow the economy by raising rates to over 5% in just over a year. These reports beat estimates and suggests that the economy in the United States continues to be strong with 253,000 new jobs added last month. The report also showed that the unemployment rate fell to 3.4% down 0.1% when compared to the prior month. In addition, the report revealed that wages rose. The unemployment rate of 3.4% matches January’s level with both months being at a level not seen since 1969. According to the New York Times, “Job growth was broad-based, even if less vigorous than the eye-popping numbers of 2022 when the nation was rapidly digging out of a deep pandemic deficit. Leisure and hospitality added 31,000 jobs, down from a 73,000-job average over the past six months but another step toward its high in early 2020.”