FUNDAMENTAL
OVERVIEW

Gold broke out of its range
on Wednesday as sentiment improved after Trump said on Tuesday that “the war
could be over soon.” That prompted traders to scale back hawkish interest-rate
expectations, which in turn put pressure on Treasury yields and the US dollar.

However, the positive mood
didn’t last long. Gold quickly fell back into the range after reports that US
intelligence had detected signs Iran might be deploying mines in the Strait of
Hormuz. Oil prices began rising again, and the hawkish bets returned.

Yesterday, Trump told Axios
that there’s practically nothing left to target in Iran and that the war will
end soon. Unfortunately, the market no longer seems to be buying the “war
ending soon” narrative. His comments were largely ignored, as traders now want
to see a clear and definitive end to the conflict.

In the short term, the
relief from a definitive de-escalation should be positive for gold, since
expectations for rate cuts would likely return. What happens next, however,
will largely depend on upcoming US data.

If the data starts to show
signs of weakness, the market will probably increase the bets on rate cuts,
which should push gold to new highs. On the other hand, if the data continues
to come in strong, gold will likely stay rangebound or potentially move lower.

GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME

On the daily chart, we can
see that gold has been consolidating around the 5,100 level with traders
awaiting new catalysts for the next direction. 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

On the 4 hour chart, we can
see more clearly the consolidation between the 5,000 support and the 5,200
resistance. The price briefly probed above the resistance but eventually returned
inside the range. The market participants will continue to play the range by
buying at support and selling at resistance until we get a breakout on either
side.

GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME

On the 1 hour chart, there’s
not much we can add here as the sellers will likely step in around the resistance
with a defined risk above it to keep targeting the support, while the buyers
will look for a breakout to pile in for a rally into new highs. The red lines
define the average daily range for today.

UPCOMING CATALYSTS

Today we get the latest US Jobless Claims figures. Tomorrow, we conclude
the week with the US PCE price index, the University of Michigan Consumer
Sentiment survey and the Job Openings data. As a reminder, the market focus
right now is solely on the US-Iran war, so the data might not matter much.