Fundamental Overview
Last Thursday, gold broke out of the recent range following the weak US jobless claims figures where initial claims spiked to the highest level since August 2023. Now, jobless claims are notoriously volatile, so that could have been just a blip, but the weak consumer sentiment report on Friday could be another supporting signal for economic weakness ahead although the data might have been skewed more by inflation worries. Overall, in the short term it wasn’t a real gamechanger and the next move will likely be set by the US CPI report due on Wednesday where hot data might send gold prices lower while soft figures should provide a boost.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold is trading basically around the cycle highs. From a risk management perspective, the buyers will have a much better risk to reward setup around the 2150 level where they will find the confluence of the trendline and the 61.8% Fibonacci retracement level. That level will likely be reached only in case inflation surprises to the upside again.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see the breakout of the recent 2280-2328 range following the US jobless claims figures. The rally eventually extended above the red line which marked the most recent lower high and defined the downtrend. Now this might have been just a fakeout, so the next catalyst that will likely confirm or deny the change in trend will be the US inflation data.
For now, I can see the market pulling back to the 2328 level to retest the resistance now turned support where we can also find the confluence of the trendline and the 61.8% Fibonacci retracement level. That’s where the buyers will likely step in with a defined risk below the trendline and 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 the 2280 level.
Upcoming Catalysts
This week all eyes will be on the US CPI report due on Wednesday, but we will have other notable releases throughout the week. We begin tomorrow with the US PPI and Fed Chair Powell speech. On Wednesday, we get the US CPI report and the US Retail Sales data. On Thursday, the focus will be on the latest US Jobless Claims figures to see whether the last week’s numbers were the start of a trend or just a fluke.
