Fundamental Overview
Gold remained supported since last Thursday following an in-line US CPI report and surprisingly weak initial jobless claims. The jobless claims data stole the show as initial claims jumped to a new cycle high and the highest level since 2021.
Eventually, it turned out that the spike in initial claims was caused by an increase in fraudulent claim attempts in Texas. Therefore, in light of this new information, jobless claims still point to a resilient labour market and the fall in continuing claims could actually be an early signal of improvement.
Nonetheless, the dovish positioning into the FOMC decision remined a tailwind for the market and might not end until we get to the actual decision or a catalyst triggers a pullback.
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. In the short-term though, hawkish repricing in interest rates expectations will likely keep on triggering corrections.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold extended the rally into a new all-time high yesterday as the dovish positioning into the FOMC decision continued to be a tailwind for the buyers. From a risk management perspective, the buyers will have a better risk to reward setup around the major trendline at the 3,400 level, while the sellers will look for a break lower to extend the drop into the 3,120 level next. Such a big correction looks unlikely though unless we get strong data in the next months and a hawkish repricing in interest rates expectations.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the bullish momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the major trendline around the 3,400 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is not consolidating right above the most recent all-time high which is acting as a minor support. We can expect the buyers to keep piling in around these levels with a defined risk below the 3,675 level to keep pushing into new highs. The sellers, on the other hand, will want to see the price falling below the level to position for a drop back into the 3,620 support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US Retail Sales data. Tomorrow, we have the FOMC policy announcement. On Thursday, we get the latest US Jobless Claims figures.
