Gold Technical Report: Gold remained sideways yesterday between 10 days Exponential Moving Average @ 1921 and 100 days EMA @ 1933 and closed the day with a small DOJI candle. Main support level is near 200 days EMA @ 1868 and immediate resistance level is near 50 days EMA @ 1944 to trade stronger. The short term Stochastics Oscillator is at 67 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 48 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: The silver prices, moved up and closed above 10 days EMA @ 22.98 for second consecutive day. The main support is near 200 days EMA @ 22.40 and main resistance level is near 50 Days EMA @ 23.47 to show strength. The Short term Stochastics Oscillator is at 76 and Relative Strength Index near 50.
Fundamental Report: The gold prices remained stable on Tuesday, benefiting from a weaker dollar and bond yields. Investors, however, displayed caution as they awaited U.S. inflation data that could impact the Federal Reserve’s policy direction. The dollar, nearing a two-month low due to expectations of lower rates, made gold more affordable for holders of foreign currencies. Benchmark U.S. yields hovered around Monday’s lows at 4.0018%. According to CME’s Fedwatch tool, investors predict a 95% chance of the central bank raising rates in its July meeting into the 5.25-5.5% range, with rate cuts potentially occurring in 2024. Higher interest rates tend to diminish the appeal of bullion, which offers no interest. Bullion has faced challenges recently, with prices declining over 7% since reaching near-record levels in early May. This downward trend is primarily due to investors revising their expectations of the Fed’s rate-hiking cycle coming to an end. Despite the support from a weaker dollar and yields, gold bugs have been reluctant to fully commit until the U.S. inflation report on Wednesday. Market expectations, as per a Reuters poll, anticipate a 0.3% month-on-month rise in core CPI for June. Given the ongoing expectation of decelerating inflation, an unexpected upside surprise could trigger significant volatility and weigh on gold prices.