Fundamental
Overview
Last week, gold pulled back
into a key trendline as the price caught up with the rise in real yields following
the hot US
NFP report. The higher-than-expected US
CPI and PPI
reports weren’t enough for the market to price out more rate cuts giving gold
the green light to restart its uptrend.
In fact, in the bigger
picture, gold remains in a bullish trend as real yields will likely continue to
fall amid the Fed’s easing cycle. The pullbacks will likely be triggered by a
repricing in rate cuts but unless the Fed’s reaction function changes, the
uptrend should remain intact.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold bounced near the key trendline and extended the rally into the
2666 level. The target should now be the all-time high around the 2685 level
where the buyers will want to see a break to increase the bullish bets into new
highs.
The sellers, on the other
hand, will want to see the price breaking below the trendline to start looking
for new lows with the 2500 level as the first target.
Gold Technical Analysis – 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that the price broke above the counter-trendline this morning. We can
expect the buyers to pile in around these levels to position for a rally into
the all-time high. The sellers, on the other hand, will want to see the price
falling back below the counter-trendline to target a drop back into the major
upward trendline.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely lean on the trendline with a defined risk below it to
position for a rally into the all-time high, while the sellers will look for a
break lower to pile in for a drop into the major trendline. The red lines define
the average daily range for today.
Upcoming
Catalysts
This week is pretty empty on the data front with just a couple of key economic
releases. Today, we have Fed’s Waller speaking, while on Thursday, we get the
US Retail Sales and US Jobless Claims data.