Gold Technical Report: Gold prices opened near 10 days Exponential Moving Average @ 1950 and tried to move up. However they could not sustain the selling pressure slipped down to close near 100 days EMA @ 1938. Long term trend is still intact as the prices and all these averages are above 200 days EMA @ 1868. However, it needs to regain the levels of 50 days EMA @ 1964 to trade stronger. The short term Stochastics Oscillator is at 26 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 42 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver slipped from intra day high breaking below 50 days EMA @ 23.84 and 10 days EMA @ 23.64 . Silver closing was also further weak as it slipped below 100 days EMA @ 23.50 . Now, 200 days EMA @ 22.46 hold a critical support level from medium term perspective. The Short term Stochastics Oscillator is at 23 and Relative Strength Index near 40.
Fundamental Report: Yesterday, the National Association of Homebuilders (NAHB) reported that homebuilders have become optimistic about the housing market outlook. US single-family homebuilding surged in May to its highest level in more than a year. Last month construction on new homes in the United States was up 21.7%. The strong uptick in demand for new single-family homes is partially the result of high mortgage rates which are currently above 6%. This creates very little incentive for existing homeowners to sell as approximately 92% of pre-existing homeowners have mortgages at much lower rates. Chairman’s Powell upcoming testimony before Capitol Hill on Thursday,June 22, coupled with a report revealing strong economic growth has created continuous bearish market sentiment for gold. Yesterday’s decline is partially due to the lingering bearish market sentiment created when the Federal Reserve revealed that it plans to enact more rate hikes this year at last week’s FOMC meeting. Now, market participants are focused on what Chairman Powell will say during his testimony to Congress tomorrow. Traders are now pricing in a 74% probability of a rate hike by the Fed in July, according to the CME Fedwatch tool. Some market participants had anticipated a more dovish outcome from the Fed, making the central bank’s recent shift disappointing for some investors.