FUNDAMENTAL OVERVIEW
Gold has entered a consolidation phase as the bearish momentum eased somewhat. The fundamentals haven’t changed at all as the US-Iran war is still ongoing and the disruption in the Strait of Hormuz is keeping oil prices around triple digit levels. This should keep the bearish bias intact for now.
There has been stronger jawboning from Trump though as he started to tout the negotiations and a potential deal almost daily now. Just today, WSJ reported that Trump would be open to end the war without pushing for a reopening of the Strait of Hormuz. That would be great news for the markets as the Iranians will likely reopen the Strait as soon as the US forces withdraw.
But we will need Trump to announce that to make it happen. He's certainly very uneasy right now with the stock market making new lows, much higher Treasury yields, triple digit oil prices and the Fed in "wait and see" mode.
Given the positioning in the market, the end of hostilities will most likely boost gold prices in the short-term as the hawkish interest rates bets would get erased quickly. On the other hand, further escalation of the conflict would add more pressure on gold and likely drag prices down into new lows.
As a reminder, Trump’s “ceasefire” ends on April 6 and he mentioned that he’d like to have a deal before that date, so keep a close eye on the headlines and especially on his Truth Social account.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold is consolidating below the broken trendline as traders await new catalysts to pick a direction. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a downward trendline defining the bearish momentum and the resistance zone around the 4,700 level. The sellers will likely lean on the trendline with a defined risk above the resistance to position for a drop into the major upward trendline. The buyers, on the other hand, will look for a break above the resistance to pile in for a rally into the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor upward trendline defining the recent pullback. The buyers will likely lean on the trendline with a defined risk below it to keep pushing into new highs, while the sellers will look for a break lower to increase the bearish bets into the major upward trendline around the 4,000 level. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US Consumer Confidence and US Job Openings data. Tomorrow, we have the US ADP, the US Retail Sales and the US ISM Manufacturing PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
