Gold rallied back to the highs as the yellow metal continues to be supported by the weaker US data and the Fed being done for the cycle. Yesterday, Gold dropped following the beat in the US Jobless Claims, but the losses were erased soon after as one beat after a series of misses doesn’t make a trend. The market is now more likely to price in rate cuts than rate hikes, which is putting downward pressure on real yields and the US Dollar. For these reasons, Gold is more likely to reach at least the all-time high in the next few months.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold bounced on the 38.2% Fibonacci retracement level of the entire rally from the 1810 level and has now reached again the recent highs around the 2010 level. The buyers should remain in the driver’s seat given the favourable fundamental conditions, so every break higher is likely to trigger even more buying pressure with the all-time highs as target.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the current price action. We can expect the buyers to lean on the trendline where they have the confluence with the 50% Fibonacci retracement level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the recent low around the 1930 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bullish setup around the 1985 level. If the price continues higher without pulling back into the trendline, we can expect the sellers to lean on the 2010 high with a defined risk above it to target a pullback into the trendline and eventually a break lower. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the all-time high.
Upcoming Events
Today the US will be on holiday for Thanksgiving Day and therefore the liquidity in the market will be thinner. Tomorrow, we conclude the week with the US PMIs where weaker data is likely to give Gold a boost while strong figures should trigger a deeper pullback.
