Gold Technical Report: Gold prices remained in narrow band yesterday with a negative bias. The upmove started when 10 days Exponential Moving Average @ 1929 crossed above 200 days EMA @ 1908. These levels will work as immediate support. The 50 days EMA and 100 days EMA are at close conjunction near 1933 and prices are trading above it while inching towards 1951 Horizontal TrendLine resistance. The short term Stochastics Oscillator is at 77 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 56 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver prices declined for fifth straight day. Last week it made a the brief intraday high above the psychological mark of 25.00 but it could not hold ground. It has been on upswing for earlier 2 weeks when it came above 200 days EMA@ 23.26 which will act as a major support now. The 100 days EMA and 50 days EMA are around same levels near @ 23.70 and 10 days EMA has already crossed above them near 24.00.The Short term Stochastics Oscillator is at 60 and Relative Strength Index near 50.
Fundamental Report : Gold and Silver displayed conflicting performance in the past week, with the former up around 1.3% and the latter relatively unchanged despite some wild swings during the five-day period, all against a backdrop of U.S. dollar indecision in the FOREX market, which saw the Dollar Index initially declined before rebounding to close largely around the flatline. The divergence within the precious metal’s complex, however, may be a temporary phenomenon, hinting at a potential convergence in their price movements in the coming days, possibly in an upward direction. That said, one possible catalyst that could have bullish implications for the space is the repricing of the Federal Reserve’s monetary policy outlook. Over the past few days, the likelihood of further FOMC tightening in 2023 has decreased, primarily due to soft U.S. economic indicators, such as August consumer confidence and July job vacancies (JOLTS). The most recent nonfarm payrolls survey has also contributed to this swing in sentiment, not by revealing weakness, but by indicating a better balance between supply and demand for workers. With the Fed embracing a data-dependent approach and pledging to proceed carefully in terms of future moves, there is the potential for interest rate expectations to tilt downward in the near term, particularly if incoming information start to show evidence of a downturn brewing on the horizon. This scenario should weigh on yields and U.S. dollar, creating a more constructive backdrop for gold and silver. A key report that may offer important clues about the evolving outlook this coming week is the ISM services activity index. This indicator is forecast to have slowed to 52.5 in August from 52.7 previously, but a deeper retrenchment should not be ruled out given the softness in some regional PMIs. In any case, the weaker the results, the better for gold and silver.