Gold has been consolidating around a key trendline as the market continues to wait for more data to push the price in either direction. All the gains from the Israel-Iran retaliations have been erased and the market should now focus back on the macro picture where rising real yields should put a lid on further gains and might even trigger a bigger selloff.
We have already priced out almost all the rate cuts that were expected at the start of the year with the market now seeing just one rate cut in September or December. This means that we will need more hot data to price out completely all the rate cuts and start pricing in the chances of a rate hike. Such a development will likely send Gold much lower from the current levels, while a deterioration in the data should lead to further gains and a new all-time high.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold continues to hover around the key trendline where we can also find the red 21 moving average for confluence. This is where the buyers keep on stepping in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next major trendline around the 2150 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the market is now trading inside a rising channel which might end up being a bearish flag if the price were to break out to the downside. The buyers will likely step in around the bottom trendline of the channel to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows with the measured target from the bearish flag standing around the 2200 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have some support around the bottom trendline where we have also the 61.8% Fibonacci retracement level for confluence. If we get another pullback into the bottom trendline, the buyers will likely step in with a defined risk below it to position for a rally into a new higher high. The sellers, on the other hand, will wait for a breakout to increase the bearish bets into new lows.
Upcoming Events
Tomorrow, we have the US Q1 Employment Cost Index and the Consumer Confidence report. On Wednesday, we get the US ADP, the ISM Manufacturing PMI, the Job Openings and the FOMC rate decision. On Thursday, we will see the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP and ISM Services PMI. Strong data is likely to weigh on Gold, while weak figures should give it a boost.
