Fundamental Overview
Last Thursday, gold
broke out of the recent range following the weak US
jobless claims figures where initial claims spiked to the highest level
since August 2023. Now, jobless claims are notoriously volatile, so that could
have been just a blip, but the weak consumer
sentiment report on Friday could be another supporting signal for economic weakness
ahead although the data might have been skewed more by inflation worries.
Overall, in the short term it wasn’t a real gamechanger and the next move will
likely be set by the US CPI report due on Wednesday where hot data might send
gold prices lower while soft figures should provide a boost.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily
chart, we can see that gold is trading basically around the cycle highs. From a
risk management perspective, the buyers will have a much better risk to reward
setup around the 2150 level where they will find the confluence
of the trendline
and the 61.8% Fibonacci
retracement level. That level will likely be reached only in case inflation
surprises to the upside again.
Gold
Technical Analysis – 1 hour Timeframe
Gold 1 hour
On the 1 hour chart,
we can see the breakout of the recent 2280-2328 range following the US jobless
claims figures. The rally eventually extended above the red line which marked
the most recent lower high and defined the downtrend. Now this might have been
just a fakeout, so the next catalyst that will likely confirm or deny the
change in trend will be the US inflation data.
For now, I can see
the market pulling back to the 2328 level to retest the resistance
now turned support where we can also find the confluence of the trendline
and the 61.8% Fibonacci retracement level. That’s where the buyers will likely
step in with a defined risk below the trendline and position for a rally into new
highs. The sellers, on the other hand, will want to see the price breaking
lower to increase the bearish bets into the 2280 level.
Upcoming
Catalysts
This week all eyes will be on the US CPI report due on
Wednesday, but we will have other notable releases throughout the week. We
begin tomorrow with the US PPI and Fed Chair Powell speech. On Wednesday, we
get the US CPI report and the US Retail Sales data. On Thursday, the focus will
be on the latest US Jobless Claims figures to see whether the last week’s numbers
were the start of a trend or just a fluke.