The rise
in US real yields coupled with a strong US Dollar is weighing a lot on Gold.
The precious metal can’t even find support from the economic data as we keep
getting strong releases that raise the risk of more rate hikes from the Fed.
All else being equal, Gold is likely to remain in a downtrend and new lows
should be expected.
Gold Technical Analysis –
Daily Timeframe
Gold Daily
On the daily chart, we can see that Gold broke
below the June low at 1893 and this has opened the door for a fall into the
1805 swing level. The trend remains bearish as the price keeps printing lower
lows and lower highs and the moving averages are
crossed to the downside. We can expect the sellers to pile in at every
pullback.
Gold Technical Analysis – 4
hour Timeframe
Gold 4 hour
On the 4 hour chart, we can see that we keep diverging with the
MACD which is
a sign of weakening momentum often followed by pullbacks or reversals. In this
case, we keep getting pullbacks that are almost perfectly rejected by the red
21 moving average as the sellers keep piling in. The buyers will need the price
to break above the trendline to have
more conviction for a bigger pullback.
Gold Technical Analysis – 1
hour Timeframe
Gold 1 hour
On the 1 hour chart, we can see more
closely the current price action and how Gold trades perfectly within a falling
channel. A break below the recent low at 1885 should see the price falling
quickly into the lower bound of the channel where we might see another bounce
into the upper bound of the channel. As long as we stay within this channel the
sellers will remain in control.
Upcoming Events
This week is
pretty bare on the data front as we only have the US PMIs on Wednesday and the
US Jobless Claims on Thursday. The rise in Treasury yields and the US Dollar is
weighing a lot on Gold, so we will likely need to get bad data to see a bigger
pullback as good data should keep the precious metal on the backfoot. This is
also the Jackson Hole Symposium week so we will hear again from many Fed
officials with the Fed Chair Powell set to speak on Friday.