Fundamental Overview
Last week’s gold’s impressive resilience in the face of major headwinds coming from strong US data, higher yields and surging US dollar proved to be a signal of underlying strength. In fact, as soon as the week started, gold surged into new all-time highs.
There might be some fears of the looming US government shutdown at the moment, but if that is cleared, the focus will turn to the upcoming US data with the NFP report on Friday being the main event.
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 caused by strong US data will likely keep on triggering corrections.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold extended the rally into yet another all-time high. From a risk management perspective, the buyers will have a better risk to reward setup around the major trendline, while the sellers will look for a break lower to extend the drop into the 3,120 level next. Such a big correction though, will likely need strong US data to trigger a hawkish repricing in interest rates expectations.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have another upward trendline defining the bullish momentum on this timeframe. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it 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 3,627 level next.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have yet another minor upward trendline on this timeframe. The buyers will likely lean on the trendline with a defined risk below it to keep pushing into new highs, while the sellers will look for a break lower to pile in for a pullback into the 3,790 support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US Job Openings data and the US Consumer Confidence report. Tomorrow, we have the US ADP and the US ISM Manufacturing PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and the US ISM Services PMI. Keep also an eye on Fed speakers.
