Fundamental Overview
Gold yesterday extended the rally into yet another all-time high. The market continues to move by inertia given the lack of bearish catalysts. Nothing has changed since the FOMC decision and traders are waiting for the jobless claims data tomorrow and the NFP report next week for the next move. Strong data will likely weigh on gold and should offer a pullback, while weak figures should keep on supporting the upside.
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 into yet another all-time high yesterday before pulling back a bit. 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 minor 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 major trendline next.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a bit of a consolidation around the highs that might have formed a descending triangle. The price can break on either side of the pattern and it’s generally followed by a more sustained move. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE report.
