Gold Technical Report: From a technical perspective, acceptance below the 50-day Simple Moving Average and a subsequent slide below Friday’s swing low, around the $2,028-2,027 region, could drag the Gold price to the $2,012-2,010 area. This is followed by the $2,000 psychological mark, which if broken decisively might shift the bias in favour of bearish traders and expose the 100-day SMA support near the $1,985 region. The Gold could eventually drop to challenge the very important 200-day SMA, near the $1,965 area.
On the flip side, momentum beyond the Asian session peak, around the $2,042 region, is likely to confront a stiff hurdle near the $2,054-2,055 zone ahead of the $2,065 area or last week’s swing high. Given that oscillators on the daily chart are just holding in the positive territory, some follow-through buying has the potential to lift the Gold price towards the $2,078-2,079 region, or the YTD peak set in January. The subsequent move-up should allow the Gold to reclaim the $2,100 mark and climb further to $2,120 resistance.
Silver Technical Report: Silver prices also moved down parallely and closed below support near 10 days EMA. The upmove was capped around 23.40 where all 50,100 and 200 days Exponential Moving Averages are merging. The Short term Stochastics Oscillator is at 61 and Relative Strength Index near 42.
Fundamental Report: The gold markets getting pale and nervous amidst surging dollar, rising yields, and Fed’s rate stance challenge gold’s appeal, as speculators withdraw, hinting at XAU/USD price decline. The absence of robust drivers for a gold rally is evident. Despite the historically inverse relationship between gold prices and the U.S. dollar, the latter’s strength, particularly after the positive jobs report, is dimming gold’s appeal. Furthermore, the surge in Treasury yields, a reflection of investor sentiment on economic resilience, is diverting attention from gold as a safe-haven asset. The Federal Reserve’s hawkish outlook, underscored by Chair Jerome Powell’s recent comments, is dampening the prospects of significant rate cuts. This scenario is reducing the allure of gold, which thrives in low-interest rate environments.