FUNDAMENTAL OVERVIEW
Gold continues to consolidate between major technical levels as traders await the US NFP and CPI reports later in the week. The fundamentals are still against rising prices due to improving US data and easing geopolitical tensions.
This Wednesday, we will get the US NFP report and that’s going to be very important for gold. In fact, the market is pricing 54 bps of easing for the Fed this year, so there’s a high risk of a hawkish repricing in case the data comes out strong. In such a scenario, we will likely see gold selling off.
On the other hand, a weak report should strengthen the case for more Fed easing and might even see traders bringing forward rate cut bets as some Fed members expressed scepticism about labour market stabilisation. In that case, gold will likely find a tailwind to rally into new highs.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold continues to consolidate above the trendline as traders await new catalysts for the next major move. If we get another flush into the trendline, we can expect the buyers to step in with a defined risk below it to position for a rally into a new record high. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 3887 level next.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see that we have a resistance zone around the 5100 level. We can expect the sellers to step in around the resistance with a defined risk above it to position for a drop into the trendline targeting a breakout. The buyers, on the other hand, will look for a break higher to pile in for a rally into new all-time highs.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much else we can add here as the sellers will look for a rejection around the resistance, while the buyers will look for a break. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we get the US December Retail Sales and the US Employment Cost Index data. On Wednesday, we have the US NFP report. On Thursday, we get the US Jobless Claims figures. On Friday, we conclude the week with the US CPI report.
