Fundamental
Overview
Gold has been on a
sustained rally ever since the last Fed’s decision as real yields fell further
due to inflation expectations rising faster than nominal yields.
More recently, real yields
pulled back a bit, while gold continued to print new highs. The new driver
could be China as last week they started to implement strong easing measures.
The market is now looking
forward to better global growth although that could come at the cost of inflation
staying above the target for longer or even reaccelerating.
Overall, there hasn’t been
any bearish catalyst since the last FOMC decision, so the bullish momentum
remained intact. Watch out for the US data this week as strong data could
trigger a bigger correction, while weak figures might lead to new highs.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold pulled back a bit from the all-time highs. From a risk management
perspective, the buyers will have a much better risk to reward setup around the
trendline. The sellers, on the other hand,
will want to see the price breaking lower to position for a drop into new lows.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that we have another trendline defining the current bullish momentum on
this timeframe. If we get a pullback, we can expect the buyers to lean on the
trendline to position for new highs. The sellers, on the other hand, will want
to see the price breaking lower to position for a drop into the major
trendline.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that the price recently broke below the upward trendline that was defining
the bullish momentum on this timeframe and the sellers piled in for a drop into
the next trendline.
We have a downward
trendline now defining the pullback. The sellers will likely lean on it to
position for new lows, while the buyers will look for a break higher to pile in
for new highs. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have Fed Chair Powell speaking. Tomorrow, we get the US ISM
Manufacturing PMI and the US Job Openings data. On Wednesday, we have the US
ADP report. On Thursday, we get the latest US Jobless Claims figures and the US
ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP
report.