FUNDAMENTAL OVERVIEW
We got a small pullback in gold in the final part of the week following a couple of good US data. Overall, the market pricing didn’t change much but the chances for a cut in January fell further. The bullish momentum remains intact for now, but the US NFP report today could challenge that.
In fact, if we get strong data, we will likely see a bigger pullback in gold as traders pare back their rate cut expectations. On the other hand, a soft report should give the market a boost as rate cut bets could increase.
Moreover, the US Supreme Court could rule on Trump’s tariffs today and that might also bring volatility in case of a surprising decision. In case tariffs get struck down, gold will likely fall amid easing stagflation risks. On the other hand, if tariffs are kept in place, it shouldn’t change much although it would keep the upside intact.
In the bigger picture, gold should remain in an uptrend as real yields will likely continue to fall amid the Fed’s dovish reaction function. But in the short term, a hawkish repricing in interest rate expectations could weigh on the market.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold continues to edge higher amid lack of bearish catalysts. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 3887 level next.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see that we eventually got the pullback into the minor support zone around the 4400 level where the buyers stepped in with a defined risk below the trendline to position for a rally into new all-time highs.
If we get another pullback into the trendline, we can expect the buyers to lean on it to keep pushing into new highs. The sellers, on the other hand, will want to see the price breaking below the support to pile in for a drop into the major trendline around the 4275 level.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as we don’t have clear levels where to lean on except the trendline. A break above the recent high at 4500 though could increase the bullish momentum as more buyers will likely pile in, especially on a soft NFP report. The red lines define the average daily range for today but they will be less reliable given the NFP report and the potential US Supreme Court decision on Trump’s tariffs.
UPCOMING CATALYSTS
Today we conclude the week with the US NFP report and potential US Supreme Court decision on Trump’s tariffs.
