Gold Technical Report: Yesterday, Gold prices tanked down further for the third straight session and crossed below August lows. Prices have reached at 6 moths low and weakness persists as it trades beow 200 days EMA @ 1893. Upside resistance lies near 1900 psychological mark and then the conjunction point of 50 days EMA and 100 days EMA near 1928 and then 1951 Horizontal TrendLine touchpoint. The short term Stochastics Oscillator is at 6 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 30 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices also declined parallely for the third straight session. It has crossed below the conjunction point of 50 days EMA and 100 days EMA near 23.40 , 200 days EMA @ 23.12 and also 10 days EMA @ 22.90 in these 3 days. The Short term Stochastics Oscillator is at 12 and Relative Strength Index near 36.
Fundamental Report: Gold’s traditional appeal as a safe haven is currently under scrutiny, especially with looming concerns about the Federal Reserve’s possible stringent measures. The current economic environment, marked by inflation surpassing the Fed’s 2% target, further complicates gold’s position. Chicago Fed President Austan Goolsbee voiced concerns that inflation overshooting this target presents a more significant risk than potential economy-slowing policies by the central bank. The dollar’s strength, hitting a 10-month high against major competitors, combined with Treasury yields peaking, further exerts pressure on the precious metal. Investors are now keenly awaiting the personal consumption expenditures (PCE) price index, slated for release on Friday, to understand the Federal Reserve’s potential interest rate trajectory better. Several forthcoming reports, including the U.S. personal consumption expenditures (PCE) index and the Labor Department’s monthly employment and CPI reports, will likely play a pivotal role in shaping market sentiment. These data releases will determine if the Federal Reserve remains on its current path or if there’s room for policy flexibility. Given the confluence of factors – the strengthening dollar, imminent economic reports, and the hovering interest rate dynamics – the near-term sentiment for gold leans bearish. Investors should keep a vigilant eye on upcoming data releases for potential market shifts.