Fundamental Overview
Last Friday, Fed Chair Powell delivered a more dovish than expected speech at the Jackson Hole Symposium as he basically kept the door open for a 50 bps cut at the September meeting. The line saying that they will do everything they can to support a strong labour market was key.
That is a positive driver for the precious metal as in the big picture, gold should remain supported as real yields fall as we head into the Fed’s easing cycle, but in the short-term strong US data might provide pullbacks along the way.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold retested the broken resistance turned support at the 2480 level and eventually extended the gains following the dovish Powell’s speech.
The buyers remain in control and should target a new all-time high. The sellers, on the other hand, will want to see the price falling back below the 2480 level to invalidate the breakout and position for a drop into the 2360 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bounce around the 2480 support where we had also the confluence of the trendline.
The buyers will likely keep on leaning on the trendline to position for new highs, while the sellers will want to see the price breaking lower and below the support to regain control and position for new lows.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price broke above the counter-trendline following Powell’s speech and it’s now trading near a key minor resistance where the price got rejected from several times.
The buyers will want to see the price breaking higher to increase the bullish bets into new highs, while the sellers will likely lean on it to position for a break below the support. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude with the US PCE report.
