After the big jump following the surprisingly dovish FOMC decision, Gold started to consolidate as the lack of major catalysts and the upcoming Christmas holidays led to a rangebound price action. In the big picture, Gold remains supported due to rate cuts expectations and falling real yields, but on a more short-term basis, the recent strong economic data could weigh on the yellow metal as the market might trim the rate cuts expected for 2024 and raise real yields.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold recently jumped to retest the broken trendline following the surprisingly dovish FOMC decision and continued to consolidate ever since. Technically, the break below the trendline opened the door for a drop into the 1930 level where we can also find the 61.8% Fibonacci retracement level for confluence but the sellers will need a catalyst and some key breaks on lower timeframes to gain more conviction for such a move.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been consolidating inside what looks now an ascending triangle. The price can break on either side of the pattern but what follows is generally a sustained move in the direction of the breakout. In this case, the buyers will want to see a break to the upside to position for a rally back into the all-time high, while the sellers will want to see a break to the downside to pile in and target a drop into the 1930 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor downward trendline inside the triangle that is defining the current downtrend on this timeframe. The buyers might want to lean on the upward trendline to position for a breakout of the triangle with a better risk to reward setup. Alternatively, they can also pile in as soon as the price breaks above the downward trendline. The sellers, on the other hand, are likely to lean on the downward trendline to position for a drop into the upward trendline in anticipation of a breakout.
Upcoming Events
Today, the market will focus on the US Jobless Claims figures as the labour market remains a key spot to watch. A fast deterioration in the data is likely to increase the rate cuts expected for next year while strong figures should have the opposite effect.
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