Gold got stuck in a consolidation lately as the market is now waiting for more data before starting to price in the next move. In fact, we have already priced out the March rate cut, so the market is now caught in a limbo between pricing back in a March rate cut or pricing out a May rate cut. The former will need weak data from now on while the latter will need strong figures. This will give traders lots of opportunities in the short term with technical levels providing some structure for their trades.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold continues to be stuck in a consolidation between the 2063 resistance and the 2015 support. The price is now near the support, and this is where we can expect the buyers to step in with a defined risk below it to position for a rally into the resistance. The sellers, on the other hand, will want to see the price breaking lower to start targeting the 1972 level next.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the rangebound price action between the key levels. We have also a downward trendline which should act as a confirmation for the buyers for a rally into the resistance in case the price breaks above it. The sellers, on the other hand, will likely lean on it to position for a breakout below the support with a better risk to reward setup.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another key resistance around the 2042 level where the buyers failed and the sellers piled in aggressively to position for a drop into the support. In fact, in case we see a break above the trendline, the buyers will also need to break above the 2042 resistance before gaining even more conviction for a move into the 2063 resistance.
Upcoming Events
This week is relatively light on the data front with the US CPI report being the main highlight. We start tomorrow with the release of the US CPI where the market will want to see if there are indeed signs of a reacceleration or not. On Thursday, we will get the latest US Jobless Claims figures, while on Friday we conclude the week with the US PPI and the University of Michigan Consumer Sentiment survey. Strong data is likely to weigh on Gold while weak figures should give it a boost.
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