Gold Technical Report: Gold prices, faced selling pressure yesterday after moving up for all five trading days last week, and closed below 10 DMA @ 1828. Since 50 DMA @ 1868 is trading over 200 DMA @ 1775, the medium term trend looks upwards. The major support stands at 200 DMA below which the trend may turn bearish. The short term Stochastics Oscillator is at 59 and Relative Strength Index is at 38.
Silver Technical Report: The silver prices too, following the suit dropped drastically and closed below both 50 and 200 DMA’s. Also, yesterday 50 PMA @ 21.36 has crossed below @ 200 PMA @ 21.50 on weekly charts , which indicate further selling pressure. The medium term trend can be considered up only if the prices move above 100 DMA @ 22.02. The Short term Stochastics Oscillator is at 48 and RSI momentum near 28.
Fundamental Report: On Tuesday the chairman of the Federal Reserve Jerome Powell addressed the Senate Banking, Housing, and Urban Affairs Committee. As anticipated the chairman delivered a strong warning that the Federal Reserve will once again modify its monetary policy to deliver tougher rate hikes at a faster pace. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,”. His address to the Senate implies that it is likely that the Federal Reserve will reverse the slower pace evident after the January FOMC meeting in which the Fed announced a 25-BPS rate hike and hence sparked a sell off in Gold.Furthermore, the chairman stated that “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”His address to the Senate implies that it is likely that the Federal Reserve will reverse the slower pace evident after the January FOMC meeting in which the Fed announced a 25-BPS rate hike. The smallest rate hike since March of last year. It also could be a warning that the Federal Reserve will raise its terminal rate objective from 5.1% to possibly 5.5% – 5.75%. According to the CME’s FedWatch tool, there is a 70.5% probability that the Fed will raise rates by 50-BPS and a 29.5% that the Fed will be less aggressive with a 25-BPS rate hike. The probability pendulum has swung widely considering that one month ago on February 7 the FedWatch tool indicated a 90.8% probability of a 25-BPS rate hike with only a 9.2% probability of a more aggressive 50-BPS hike. The Federal Reserve’s official odds for a recommendation of a 50-BPS rate hike this month is more likely now after Powell’s address to the Senate.