Gold continues to rise amid a lack of bearish catalysts and pretty stable price action in real yields and the US Dollar. In fact, the market has already priced out the aggressive rate cuts and it’s now in line with the Fed’s projection of three rate cuts. In the big picture, Gold should remain supported as we head into the easing cycle but in the short term it could come under pressure if the data comes out hot and makes the market to expect even less rate cuts than the Fed’s projection.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold is approaching a key trendline around the 2045 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 is diverging with the MACD as it approaches the key trendline. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it could be an extra bearish signal for the market and another confluence for the sellers. The buyers will need the price to break decisively above the trendline to invalidate the bearish setup and increase the bullish bets into the 2080 resistance.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is indeed losing momentum as the price action became rangebound as depicted by the blue box. There’s not much to do here other than waiting for the price to reach the key trendline.
Upcoming Events
Today we will see the US PCE and the latest US Jobless Claims figures, while tomorrow 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.