Fundamental Overview
The price action in gold in the last few trading days has been all over the place. We saw a strange rally following the strong US NFP report and a drop to erase all the gains yesterday despite the lack of key catalysts.
We now have the US PPI and CPI reports ahead and those will likely set the trend for the next weeks. The market pricing is now erring on the hawkish side compared to the Fed’s projections as the market sees just one cut by the end of the year.
Hot data could trigger a big selloff unless the market becomes concerned about the Fed’s willingness to do whatever it takes to get inflation back to target. On the other hand, soft data should lead to a rally as the market will likely pull back from the aggressive hawkishness.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold continues to trade inside the range between the 2600 support and the 2721 resistance. The price has been slowly edging higher from the support as the buyers continue to push towards the resistance. We have two big risk events ahead with the US PPI today and the US CPI tomorrow. They will likely set the trend for the news weeks.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can that the price came back yesterday to retest the middle of the range around the 2660 level. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into the resistance. The sellers, on the other hand, will look for a break lower to target a drop into the 2600 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will look for a bounce around the middle of the range, while the sellers will look for a fall below it to increase the bearish momentum. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we get the US PPI data. Tomorrow, we have the US CPI report. On Thursday, we get the latest US Jobless Claims figures.
