Gold Technical Report: The gold witnessed a strong rally last week. The prices have picked up pace after crossing 50 DMA @ 1678 on Daily charts and yesterday continued the move. The next Major resistance is 200 DMA @1802.65, above which the main trend will turn positive. The short-term Stochastics Oscillator is at 96 and the Relative Strength Index is at 70.
Silver Technical Report: The silver prices also parallel with Gold witnessed a sharp up move last week. Positive for silver unlike gold is that prices were already above 50 DMA and now have also crossed 200 DMA @ 21.43. On the downside, major support is only at 50 DMA @ 19.53, crossing below which will change the medium-term trend into negative. The Short term Stochastics Oscillator is at 88 and the RSI momentum is near 71.
Fundamental Report: Gold inched higher on Monday in a tentative trade as investors eyed firm U.S. Treasury yields and a steady U.S. Dollar throughout the session. Influencing the trade were comments from Fed officials indicating the central bank was not softening its fight against inflation despite last week’s tepid U.S. consumer inflation report. The SPDR Gold Shares ETF (GLD) is at $164.94, up $0.38 or +0.23%. Fed Vice Chair Lael Brainard on Monday joined Governor Christopher Waller, to indicate the Fed is ready to begin moving in smaller rate hike increments, while still emphasizing what Brainard called the central bank’s “resolve” to keep pushing rates higher as needed to battle a surge in inflation. Despite the Fed member warnings about higher rates, Fed funds futures traders see an 89% probability of a 50 basis point increase at the central bank’s December meeting, with only an 11% likelihood of a 75 basis point rise.
Federal Reserve Governor Christopher Waller told a conference in Sydney, Australia today, “We’re not softening…Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a way out there.” Gold traded to a low of $1762 at approximately 8:13 PM EST. This morning’s decline was the result of both dollar strength and a warning by Christopher Waller that the Federal Reserve’s monetary policy was not wavering from its strong commitment to continue to use rate hikes to fight against persistent inflation. On Sunday speaking at a conference sponsored by UBS Waller said that although the central bank is looking at the possibility of a slower pace of raising interest rates, this consideration should not be interpreted as a softening in its fight for price stability.