Last week, Gold sold off following a hot US CPI report that made the market to trim further the rate cuts expectations and raised real yields and the US Dollar. In the following days though, the price started to bottoming out and even make higher highs and higher lows on the lower timeframes. Moreover, last Friday, we got a hot US PPI report, but after a brief dip, Gold started to rally more strongly and eventually broke through the resistance almost erasing all the week’s losses.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold broke through the key 2015 resistance despite the hot US CPI and PPI reports. This breakout opened the door for a rally into the next resistance around the 2063 level, so the buyers will look for dip-buying opportunities on the lower timeframes while the sellers will want to see a failure to start targeting again the 1973 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had a strong resistance zone around the 2015 level where we had also the confluence with the trendline and the 61.8% Fibonacci retracement level. The buyers piled in on the breakout to target the 2063 resistance. The sellers, on the other hand, will want to see the price falling back below the resistance to leave behind a fakeout and position for a drop into the 1973 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that if we were to get a pullback from these levels, the buyers will likely step in again around the resistance now turned support where they will also find the red 21 moving average for confluence. The sellers, on the other hand, can only wait for a breakout to the downside before considering new short positions.
Upcoming Events
This week is basically empty on the data front with just the release of the FOMC Meeting Minutes on Wednesday followed by the US Jobless Claims and the US PMIs on Thursday. Strong data is likely to weigh on Gold while weak figures should give it a boost.
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