Gold Technical Report: Yesterday, Gold succumbed to selling pressure and closed below 10 Days Moving Average @ 1956. Now this 10 DMA and 50 DMA@ 1967 will act as resistance for any move forward. Next short term support stands at 100 DMA @ 1937. The short term Stochastics Oscillator is at 29 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 43 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices also declined following the suit, and closed near 100 DMA @ 23.46. Silver is now poised between support at 10 DMA @ 23.55 and resistance at 50 DMA @ 23.84 The medium term trend looks intact as all of these averages above 200 DMA @ 22.38. The Short term Stochastics Oscillator is at 70 and Relative Strength Index near 47.
Fundamental Report: Market In the lead-up to their hotly anticipated FOMC Policy Meeting on June 13-14, several top Fed officials have endorsed the need to continue raising interest higher as ‘insurance’ against inflation. A move that would lift the federal funds rate to a target range of 5.25% to 5.50%, the highest level since January 2001, up from nearly zero early last year. In addition, OPEC’s recent decision to cut global supply in an effort to increase Oil prices – has only added to those concerns and made the Fed’s job of lowering inflation a lot more challenging. Now, the U.S central bank faces a tricky balancing act as it prepares to deliver another interest rate hike in exactly a week from today, against a backdrop of one of the most uncertain economic environments since the Global Financial Crisis in 2008. The big risk from both an economic and market liquidity perspective is if the Fed hikes more than currently priced in. For a while, the market was convinced that the Fed will soon pivot to rate cuts. But the strength of recent hotter-than-expected economic data as well as OPEC’s supply cuts, has once again led to a repricing of rate expectations. With the Fed’s credibility at stake and inflation still well above their 2% target, there is now huge pressure on policymakers to hike rates again at the upcoming FOMC meeting.