Gold
continues to range as the uncertainty in the market remains at the highest
level. In fact, we continue to see selloffs on good data and rallies on weak
readings but never a sustained move. The Fed yesterday indicated that another
hike might still be in the cards, and it projected to keep rates higher for
much longer than the market expected as the Dot Plot showed less cuts in 2024. Higher
real yields are bearish for Gold but if the economy deteriorates much faster
than anyone expects, we should see real yields coming down and Gold moving up.
Gold Technical Analysis –
Daily Timeframe
Gold Daily
On the daily chart, we can see that Gold tried to
rally above the 1934 resistance but got
smacked back down soon after following the FOMC meeting. The price left a long
tail on the resistance, which is usually a reversal signal, but a lot will
depend on the data. The sellers though are likely to pile in here with a
defined risk above the resistance to target the 1893 support. The buyers, on
the other hand, will want to see the price to rally back above the resistance
to invalidate the bearish setup and start targeting the 1984 resistance.
Gold Technical Analysis – 4
hour Timeframe
Gold 4 hour
On the 4 hour chart, we can see more closely what
could end up being a fakeout. The price made a new lower low following the FOMC
meeting and the moving averages have
crossed to the downside. This might be an early signal of another selloff into
the support incoming as the market structure turned from bullish to bearish.
Gold Technical Analysis – 1
hour Timeframe
Gold 1 hour
On the 1 hour chart, we can see that we
had a divergence with
the MACD right
when Gold was trying to break out. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. In this case, the support
zone around the 1923 level will be key as the buyers are likely to pile in here
with a defined risk below the level to target a new high, while the sellers
will look for a break lower to position for a selloff into the 1893 support.
Upcoming Events
The week is drawing to a
close, but we still have a couple of key economic releases ahead. Today, the main event will be the US Jobless Claims
report as the labour market data remains very important for the Fed and the
market. Tomorrow, we will see the latest US PMIs data which is expected to be
market moving. Strong data is likely to weigh on Gold while weak reading should
support it.