The US data started to surprise to the downside recently and that has brought real yields and the US Dollar down. In fact, the market is increasingly confident that the Fed is done with the tightening cycle, and we are now looking at when the central bank is going to cut rates. The combination of these factors gave Gold a boost and we are likely to see more of the same if the data continues to weaken.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that the trend in Gold has switched to the upside as the price has been printing higher highs and higher lows and the moving averages have crossed to the upside. We can also see that Gold broke above the key 1934 resistance and the next stop should now be the 1984 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that Gold is trading within a rising channel and the price recently bounced on the key resistance turned support where we had also the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. That’s where the buyers piled in with a defined risk below the level to target the 1984 resistance. The sellers, on the other hand, will need the price to fall below the key 1934 level to confirm a change in trend and position for a fall into the 1893 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance around the 1950 level that the buyers will need to break to continue the rally into the 1984 resistance. In fact, we now have this mini range with the 1934 support and 1950 resistance that gives us a clear structure for the next move. A break to the upside should lead to more buying, while a break to the downside should lead to more selling.
Upcoming Events
This week is pretty empty on the data front with just the US ISM Services PMI scheduled for Wednesday and the US Jobless Claims on Thursday. Better than expected data should weigh on Gold in the short term, while worse than expected figures should give it even more strength.