Fundamental
Overview
The upside in gold continues to be capped by the selloff in the US stock
market as it tightens financial conditions when it’s this aggressive.
The problem is that we got weaker economic data amid increasing inflation
expectations. The market might be fearing that in case we get a slowdown, the
Fed might not be fast enough in cutting rates due to the inflation constraint
which would worsen the economic pain.
The US CPI report tomorrow is the main event of the week and will likely trigger
big moves in the market. Hot data will likely lead to a strong selloff in gold,
while soft figures might give the green light for another rally.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold couldn’t extend the rally into a new all-time high recently as
the US stock market selloff continues to cap the upside. There’s not much we
can glean from this timeframe so we need to zoom in to see some more details.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that the price is stuck in a range between the 2892 support
and the 2930 resistance although we had a fakeout below the support yesterday.
The buyers are likely to step in around these levels to position for a rally
into the resistance, while the sellers will look for another break lower to
pile in for a drop into the 2790 level next.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that we had a minor downward trendline
defining the bearish momentum on this timeframe. The price broke above it this
morning and it’s also trading above the support zone. This should give the
buyers enough conviction to push into the resistance, while the sellers will
look for a break below the support to invalidate the bullish setup. The red
lines define the average daily range for today
Upcoming
Catalysts
Today we get the US Job Openings data. Tomorrow,
we have the US CPI report. On Thursday, we get the US PPI data and the US
Jobless Claims figures. On Friday, we conclude the week with the University of
Michigan Consumer Sentiment report.
