Gold has been consolidating below the 2400 level since last week as the mix of geopolitical and macro drivers led to a rangebound price action. In fact, on the geopolitical front, we still have some fears of an Israeli retaliation against Iran, although they are slowly dissipating due to the lack of a follow-through since Monday. On the macro side, the real yields have risen notably in the past couple of weeks, which is generally a negative driver for the Gold market. That was not the case this time and it’s not yet clear if it’s just because of geopolitical fears or something else. If it’s indeed just because of geopolitical fears, we might see a quick drop at some point, so it will be important to monitor the technical levels.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold got stuck in a consolidation just beneath the 2400 level. From a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where they will also find the confluence of 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 increase the bearish bets and target a bigger drop into the next trendline around the 2100 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it led to pullbacks into the minor black trendline where the buyers keep on leaning onto to position for new higher highs. If the price were to break lower, the reversal would be confirmed, and the sellers will pile in more aggressively to target a drop into the trendline around the 2300 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a strong resistance zone around the 2395 level where the price got rejected from several times since last week. If the price were to get there again, the sellers will likely step in again with a defined risk above it to position for a break below the trendline with a better risk to reward setup. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into a new all-time high.
Upcoming Events
Today we have the last important report of the week, that is the latest US Jobless Claims figures. Strong data is likely to weigh on Gold, while weak figures should give it a boost.
