Gold Technical Report: Gold prices increased for the third straight session yesterday and closed above the 10 days Exponential Moving Average @ 1908 after a struggle of 16 days stretch. The 50 days EMA and 100 days EMA are at close conjunction near 1936 which will act as an immediate target as well as next reistance. The short term Stochastics Oscillator is at 58 (it is considered overbought when above 80 and oversold when below 20) and Relative Strength Index (RSI) is at 51 (it is considered overbought when above 70 and oversold when below 30).
Silver Technical Report: Silver continued the rally with an impressive performance and closed above 100 days EMA @ 23.48 after 15 days of struggle. The 100 days EMA and 50 days EMA are at close conjunction and 10 days EMA is poised to cross above them. The Short term Stochastics Oscillator is at 91 and Relative Strength Index near 60.
Fundamental Report :The strong drop in treasury yields was due to a reaction by traders of multiple poor economic reports out of Europe. The eurozone PMI (Purchasing Managers Index) created by combining economic data from the manufacturing and service sectors revealed that activity dropped in August to the lowest level in almost 3 years. An economic report out of the UK showed a similar pattern with the survey revealing that activity was at a 31-month low. The net result from a drop in treasuries was a strong gain of 3.94% in silver and approximately 1% in gold as precious metals traders reacted to the report out of the eurozone and the UK. Now, the investors and analysts await the speech from Chairman Powell at the central bank’s summer symposium this Friday. The world’s most powerful central bankers prepare to gather at the Federal Reserve’s Economic Symposium in Jackson Hole. After an era of relentless inflation and worries that the U.S central banks most aggressive interest rate hiking campaign ever seen would end up tanking economies – there are signs that a recession can be avoided, for this year at least. A recent string of data shows that America’s inflation problem is definitively getting better. Specifically, market participants want to know if the Fed will maintain its current mandate and raise rates by ¼% one last time this year, or if the Fed will pivot from its current monetary tightening campaign.