FUNDAMENTAL OVERVIEW
Gold got stuck in another consolidation as the bullish momentum remains weak amid conflicting signals. Yesterday, it looked like the third round of US-Iran talks went bad as we got reports of Iran rejecting US demands. The markets went into risk-off, eventually supporting gold prices.
Later on, we got reports that the talks made significant progress and another round was scheduled for next week. This push and pull is keeping most market rangebound, including gold.
Overall, the market might remain supported in the short-term amid some uncertainty, but I don’t see material changes to justify a rally back to all-time highs, at the moment. The real risks remain a potential US-Iran military escalation which could take gold prices to new highs or a hawkish repricing on stronger US data which would have a negative effect on the market.
Fed’s Waller mentioned that he would change his dovish stance in case the strong January’s jobs data is repeated in February, so next week’s NFP report is going to be a key risk event for gold.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold is creeping higher, but the momentum remains weak with many consolidations along the way. 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 can see the price is consolidating above the key 5100 zone as traders await new catalysts to pick a direction. From a risk management perspective, the buyers will have better risk to reward opportunities around the 5100 support and the minor upward trendline to position for a rally into new all-time highs. The sellers, on the other hand, will want to see the price breaking below the trendline to open the door for a drop back into the 4600 level next.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the buyers will likely continue to step in around the support and the trendline, while the sellers will wait for the break of the trendline to gain more conviction for new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we conclude the week with the US PPI report but continue to watch out for US-Iran headlines.
