The Fed hiked interest rates by 25 bps as expected and left everything unchanged. Fed Chair Powell didn’t hint to anything and reaffirmed their data dependency keeping all the options on the table. The US data since the FOMC meeting has been mixed but the labour market indicators continue to point to a very strong jobs market. In fact, the recent beat in the US ADP report on Wednesday was one of the catalysts that pushed long term Treasury yields and the US Dollar higher, ultimately weighing on Gold as it’s sensitive to real yields and dollar moves.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold rejected the 1984 resistance and started to decline as the US data remained strong. We are now at a strong support level at 1934 where we are likely to see the buyers stepping in with a defined risk below the level to target the 1984 resistance and eventually a breakout. The sellers, on the other hand, will want to see the price breaking lower to increase the selling pressure and pile in to target the 1805 swing low level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the key levels of support and resistance. If the price breaks below the current 1934 support, we are likely to see a move towards the 1893 low next. On the other hand, if the price bounces, we should see a rally into the 1984 resistance. So, what happens here will decide where Gold is going to go next.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that Gold has been consolidating around the support level as the market is probably awaiting the NFP report today. If the price breaks above the trendline and the previous swing low at 1942, the bounce should be confirmed and the buyers would be in control to take the price towards the 1984 resistance. The sellers, on the other hand, need just to wait for the price to break the consolidation lower to confirm the break and target the 1893 low.
Upcoming Events
Today, all eyes will be on the latest US NFP report. The Fed will see another NFP report before the next meeting so this one won’t decide what they are going to do but it can change market expectations, nonetheless. Strong data should weigh on Gold as the market would expects the Fed to remain hawkish, while weak readings are likely to support it as the market would expect the Fed to be done already with the last week’s rate hike.