Fundamental
Overview
Gold extended the rally triggered by the soft US CPI into a
new all-time high following the soft US
PPI data on Thursday. The components that feed into the US Core PCE though increased
the estimates for the next release.
In the bigger picture though, as long as the Fed doesn’t change its
reaction function and doesn’t mention rate hikes, the trend should remain to
the upside as real yields will continue to fall unless we get another strong
growth scare.
The attention now switches to the FOMC Policy Decision due on Wednesday when
the Fed is expected to keep rates unchanged. The markets will focus
particularly on the Dot Plot to see if the central bank revises the expected
rate cuts in 2025 from two to three.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold managed to extend the rally into a new all-time high following
the soft US PPI report. From a risk management perspective, the buyers will
have a better risk to reward setup around the 2955 level to position for
further upside, while the sellers will want to see the price falling below the
level to start targeting a pullback into the 2832 level next.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see more clearly the key levels where the buyers can lean onto for further upside.
The first one comes around the previous all-time high at 2955, while the second
one around the trendline. The sellers, on the other hand,
will look for the price to break below those levels to pile in for new lows.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that the recent price action formed what looks like a head
and shoulders pattern. The buyers will step in around the neckline with a
defined risk below it to keep pushing into new highs, while the sellers will
look for a break lower to target a pullback into the 2955 level next. The red
lines define the average daily range for today
Upcoming
Catalysts
Today we get the US Retail Sales data. On
Wednesday, we have the FOMC Policy Decision. On Thursday, we get the US Jobless
Claims figures.
