Gold Technical Report: After the massive fall earlier, last week gold prices recorderd a green candle everyday suggesting buoyancy in the market. Carrying ahead the same trend ahead this week, it has crossed over the main level of $1680, and now the medium term trend points upwards. They may take some time to hover around and then convincingly cross 50 DMA on daily charts. The Short term Stochastics Oscillator is at 95 and RSI momentum is 57.
Silver Technical Report: After the massive fall earlier, last week, silver prices signaled to retrace back.The prices are currently hovering around 200 PMA on weekly charts. However if the prices break earlier bottom and major support at 17.60 , it will change the medium term trend into negative. On upside, crossing of 200 DMA at 21.91 will change the main trend to positive. The Short term Stochastics Oscillator is at 92 and RSI momentum near 64.
Fundamental Report: Over the last five trading days, gold hit a bottom at approximately $1621 and gained well over $100 in a short time. In the same way that gold bottomed five trading days ago on Wednesday, September 28, concurrently the dollar peaked on the same day hitting its highest value in 20 years. Today the dollar continues to fall dropping by 1.42% with the dollar index currently fixed at 110.35.There is no denying that the global markets have entered an exciting new phase in monetary policy as central bankers across the world ramped up their fight against rapidly surging inflation. After being criticized for being slow to recognize inflation, the Federal Reserve and its central-banking peers have embarked on their most aggressive series of rate hikes since the 1980s. As a result, there’s really nothing historical you can point to for what’s going on in markets today – we are seeing multiple standard deviation moves across every asset class – presenting savvy traders with back to back money-making opportunities, almost on a daily basis. Aggressive moves specifically from the Fed in recent months have dramatically strengthened the dollar – raising concerns among leading Wall Street economists that the dollar will be the next asset bubble to burst. According to Morgan Stanley – “such U.S dollar strength has historically always ended in some kind of financial or economic crisis” and that’s the exact direction we are heading in again. In fact, it was against that strong dollar backdrop that the Bank of England was forced to revert back to unprecedented “Quantitative Easing” measures, to avert a full-blown global financial meltdown. With the Fed and ECB hiking aggressively into a weakening economy – the big question is who will be next to switch on their money printing machines and revert back to quantitative easing again? Only time will tell, however, the one thing we do know is that extraordinary times create extraordinary opportunities and right now, this market is a traders’ paradise!