Gold has been rising steadily recently as the market priced out most of the expected rate cuts and converged with the Fed’s forecast of three cuts for this year. We are now in a state of equilibrium, so the data in the next few weeks will be very important for the market direction. Hot economic data might even make the market to price out the rest of the rate cuts raising Treasury yields and the US Dollar and eventually weigh on Gold. Conversely, if the data starts to deteriorate, then the market will restart to price in more rate cuts and send Gold to new highs.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold is approaching a key trendline around the 2050 level. This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 2080 resistance.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently got rejected from the 2032 resistance but eventually bounced back from the 2015 support and broke out to new highs. We got a pullback into the resistance now turned resistance where we can also find the 38.2% Fibonacci retracement level for confluence. This is where the buyers stepped in to target an extension into the downward trendline. The sellers, on the other hand, will want to see the price breaking below the support to position for a drop into the upward trendline and target a break below it.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the price bouncing on the 2032 support and the red 21 moving average. If we get the extension into the trendline from here, it might diverge with the MACD and that will make things even more interesting as the data will be the final catalyst for a big move on either side.
Upcoming Events
This week we have some important economic data on the agenda. We begin tomorrow with the release of the US Consumer Confidence report. On Thursday, we will see the US PCE and the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US ISM Manufacturing PMI. Strong data is likely to weigh on Gold, while weak figures should give it a boost.