Fundamental
Overview
The markets have been
waiting for the US
NFP to provide a clear signal for either a 25 or 50 bps cut at the upcoming
FOMC meeting, but instead we got a mixed report with some better details under
the hood.
The probabilities for a 50
bps cut decreased as a result and they are now standing around 27%. A soft US
CPI report tomorrow might increase those probabilities a little bit, but we will
still head into the FOMC decision with a 25 bps cut as the most probable
scenario.
In the bigger picture, gold
should remain supported as real yields fall due to the Fed’s rate cut cycle,
but in the short-term, strong or better US data might weigh on the market a
bit.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold remains stuck in the range between the 2480 support
and the 2530 resistance. We will need a strong catalyst to break out of the
range and if it doesn’t come this week, it will definitely come next week with
the FOMC decision.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see more clearly the range between the 2480 support and the 2530 resistance. The
market participants keep on “playing the range” by buying at support and
selling at resistance waiting for a breakout on either side.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that we have an interesting zone around the 2506 level where the price reacted
to several times in the past couple of weeks. This might act as kind of
barometer for the sentiment with aggressive traders positioning for longs on a
break above the level and sellers positioning for shorts around the level. The
red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Small Business Optimism Index. Tomorrow, we get the US
CPI report. On Thursday, we have the latest US Jobless Claims figures and the
US PPI data. On Friday, we conclude the week with the University of Michigan
Consumer Sentiment report.