Fundamental Overview
Last week, gold pulled back into a key trendline as the price caught up with the rise in real yields following the hot US NFP report. The higher-than-expected US CPI and PPI reports weren’t enough for the market to price out more rate cuts giving gold the green light to restart its uptrend.
In fact, in the bigger picture, gold remains in a bullish trend as real yields will likely continue to fall amid the Fed’s easing cycle. The pullbacks will likely be triggered by a repricing in rate cuts but unless the Fed’s reaction function changes, the uptrend should remain intact.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold bounced near the key trendline and extended the rally into the 2666 level. The target should now be the all-time high around the 2685 level where the buyers will want to see a break to increase the bullish bets into new highs.
The sellers, on the other hand, will want to see the price breaking below the trendline to start looking for new lows with the 2500 level as the first target.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke above the counter-trendline this morning. We can expect the buyers to pile in around these levels to position for a rally into the all-time high. The sellers, on the other hand, will want to see the price falling back below the counter-trendline to target a drop back into the major upward trendline.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. The buyers will likely lean on the trendline with a defined risk below it to position for a rally into the all-time high, while the sellers will look for a break lower to pile in for a drop into the major trendline. The red lines define the average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with just a couple of key economic releases. Today, we have Fed’s Waller speaking, while on Thursday, we get the US Retail Sales and US Jobless Claims data.
