Gold Technical Report: The gold had posted 4 continuous weekly rallies and was marching towards 200 DMA @1833. However it is going through a correction this week. Since the 50 DMA still trading below 200 DMA , the medium term trend looks still bearish. Any slippage down the nearest main bottom at $1676 will turn the Main trend negative. On the upside, the immediate resistance for main trend is the 200 DMA. The Short term Stochastics Oscillator is at 20 and RSI momentum is near 52.
Silver Technical Report: Silver prices trading around 50 DMA after crossing above it last week.We may expect fresh buying support emerging against profit booking here, heralding volatility in prices, as they approach 200 DMA. Support levels are around 20 DMA at 19.80 and next major resistence will be faced only around 21.00, the levels not seen after June. The Short term Stochastics Oscillator is at 27 and RSI momentum near 53.
Fundamental Report: Gold prices edged lower on Tuesday as Treasury yields moved higher ahead of Wednesday’s U.S. Retail Sales report and the Federal Reserve’s July meeting minutes. Retail sales will reveal to the Fed the strength of consumer spending in an economy that according to some is headed into recession. The Fed minutes will likely provide clues about the central bank’s future interest rate moves. Gold could get hit hard on Wednesday if the retail sales are strong and the Fed minutes are hawkish. On Tuesday, gold prices settled at $1775.55, down $3.79 or -0.21%. The SPDR Gold Shares ETF (GLD) finished at $165.45, down $0.26 or -0.16%. U.S. economic data came in mixed with a report from the Commerce Department showing U.S. Industrial Production increased in July following a revised unchanged reading in June. The number came in better than the forecast. Data from the Commerce Department showed a plunge in housing starts, worse than the estimate. Building Permits, an indicator of future housing demand, also declined, but less than the forecast.
This could be a volatile week due to the FOMC meeting minutes, key economic reports as well as scheduled speeches from Fed officials. All eyes will be on the Federal Reserve meeting minutes released on Wednesday. This will be closely scrutinised by investors for any fresh clues into what policymakers were thinking when rates were hiked by 75 basis points for a second straight meeting. If the minutes strike a hawkish tone, this could inject dollar bulls with fresh inspiration as rate hike bets jump towards another jumbo-sized September move. Alternatively, any dovish hints or caution may encourage some dollar weakness. It will also be wise to keep an eye on the US retail sales report for July published mid-week and speeches by Kansas City Fed President Esther George and Minneapolis Fed President Neel Kashkari on Thursday. Oil prices may further come off as China’s growth fears and prospects of rising supply empowered bears. Given how Libya is pumping more oil and Iran is moving closer to restoring a nuclear deal, this could result in higher flows at a time when demand remains shaky. Both WTI and Brent remain under pressure on the daily charts with a stronger dollar seen enforcing downside pressures. The benchmarks have shed roughly six per cent this month with the current fundamental drivers opening the doors to further losses this week. If history is anything to go by, then the one thing that we do know for certain is both scenarios, whether that’s persistent Inflation or a Recession, ultimately present an extremely lucrative backdrop for commodity prices.