Gold has been falling steadily in the past few days as the market continues to reprice the aggressive rate cuts expectations following Fed’s Waller comments. Moreover, the US data recently has been surprising to the upside which strengthened the case for a repricing in expectations, which is leading to a rise in real yields and the US Dollar. In the short-term Gold should continue to fall as long as the US data remains strong but watch out for downside surprises as those can trigger a relief rally, which would be in line with the big picture upside view, and therefore provide some strong moves.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold broke the key trendline around the 2020 level and extended the drop into the 2000 level. The sellers piled in on the breakout and are now targeting the 1972 level. The buyers, on the other hand, will need the price to break above the downward trendline to flip the bias from bearish back to bullish.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price pulled back into the key support around the 2015 level that now turned into resistance. This is where the sellers should step in again with a defined risk above the level to position for a drop into the 1972 level. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into the 2050 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a trendline right around the key resistance and we can also find the confluence with the Fibonacci retracement levels and the red 21 moving average. All these confluences make this resistance zone key for the sellers, so if the price breaks above it we can expect the sellers to fold and the buyers to pile in instead.
Upcoming Events
Today, we will see the latest US Jobless Claims figures, while tomorrow we conclude the week with the University of Michigan Consumer Sentiment survey. Strong data should keep on weighing on Gold while weak figures are likely to provide some support.
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