Fundamental Overview
Gold erased most of the losses from the Monday’s global stock market rout as the ISM Services PMI and especially the US Jobless Claims yesterday improved the risk sentiment. This might be just a retracement of the liquidations experienced on Monday as it doesn’t look like there are strong reasons for a rally in the short term.
In fact, the market might price out some of the aggressiveness in rate cuts expectations which could weigh on gold in the short term. That might lead to an overall rangebound price action but in the long term, the bullish case for gold remains intact as the Fed is going to cut rates anyway.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold eventually bounced around the 2360 support zone and extended the gains into the 2430 resistance. The buyers will want to see the price breaking higher to increase the bullish bets into a new all-time high. The sellers, on the other hand, will likely lean on the resistance with a defined risk above it to position for a drop back into the 2360 support.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke above the downward trendline and extended the rally into the 2430 resistance as the buyers piled in with more conviction. There’s not much else to glean from this timeframe as the price remains confined in a range between the 2360 support and the 2483 resistance.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have an interesting zone around the 2410 level where the price got rejected from several times in the past days. This is where we can expect the buyers to step in with a defined risk below the zone to position for a break above the 2430 resistance and a rally into the 2483 high next. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 2360 support. The red lines define the average daily range for today.
