Gold Technical Report: Gold prices tried to stabilize yesterday after a big decline last week when it crossed below 10 days Exponential Moving Average @ 1960. The prices earlier kept climbing above July High levels breaking the 2000 mark but shying away from 2010 consistently. The technical pullback last month was strong enough to cross above 50 days, 100 days and also 200 days Exponential Moving Average in a single day. On the reverse, the 10 days EMA has also crossed 200 days and 50 days EMA signifying strength. Gold had been on decline throughout earlier but started the rally with a gap up. Prices had reached at 7 moths low and received a much awaited relief. The short term Stochastics Oscillator is at 15 (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: Silver prices also declined parallely earlier in the session breaking Sep lows but recovered in the end of the day to close in green . It posted a solid green candle last week as prices crossed and closed above all 10,50,100 and 200 days Exponential Moving Average in a single day. It is trying hard to hit the Oct month highs near 23.70 but faces a strong resistance above 23.00 due to consistent selling pressure. The Short term Stochastics Oscillator is at 17 and Relative Strength Index near 43.
Fundamental Report: Gold is currently trading in a challenging landscape, marked by its recent slump to a three-week low. This downturn coincides with a resilient U.S. dollar and the anticipation of key U.S. inflation (CPI) data, which traders are closely monitoring to gauge the Federal Reserve’s next move on interest rates. Recent drop in gold prices, is primarily influenced by Fed Chair Jerome Powell’s hawkish remarks, which dampened hopes for interest rate cuts. The upcoming U.S. consumer price index (CPI) data, expected to show continued inflationary pressures, plays a critical role in this narrative. A strong dollar, further bolstered by expectations of persistent inflation, has diminished gold’s appeal for investors holding other currencies. As investors await the CPI release, attention is also turning to U.S. retail sales data, which will provide insights into consumer demand amid high borrowing costs. These economic indicators are crucial in shaping market expectations regarding the Fed’s ongoing battle against inflation and the subsequent impact on gold prices.In the short term, gold’s direction seems to be hanging in the balance, influenced by the interplay of inflation data, the strength of the U.S. dollar, and economic growth indicators. While geopolitical risks and central bank purchases offer some support, the Fed’s monetary policy tightening cycle and the dollar’s direction are key factors to watch. Looking ahead, the macroeconomic environment could turn favorable for gold. With the U.S. monetary tightening cycle nearing its end and the dollar potentially reaching its peak, we may see a moderation in U.S. 10-year yields and the dollar’s strength. This shift could bolster gold’s investment appeal, offering a ray of hope for its recovery in the near term.