FUNDAMENTAL
OVERVIEW
Gold has been trading in a
tight range for about a week now, as tighter financial conditions outweighed stagflation
risks.
The hawkish expectations
around interest rates eased yesterday after Trump told CBS that the war could
be over soon. Following the comment, Treasury yields and the US dollar weakened
as traders started to look forward to a potential de-escalation.
In the short term, the
relief from a possible de-escalation could 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 could 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
Gold – daily
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
Gold – 4 hour
On the 4 hour chart, we can
see more clearly the consolidation between the 5,000 support and the 5,200
resistance. 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
Gold – 1 hour
On the 1 hour chart, we have
a minor upward trendline defining the current bullish momentum on this timeframe.
If we get a pullback, we can expect the buyers to lean on the trendline with a
defined risk below it to keep pushing into new highs. The sellers, on the other
hand, will look for a break to increase the bearish bets into the support next.
The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US CPI report. On Thursday, we get the latest US Jobless
Claims figures. On Friday, 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.
