Fundamental Overview
Gold has been on a steady retreat since hitting a new all-time high on Wednesday. The price tonight fell below the previous key resistance at 2430 level, and some might start questioning if this is just a pullback or the breakout was in reality a fakeout.
As of now, it looks like gold have limited downside but lots of upside as inflation abates slowly while risks to the growth picture increase the longer the Fed keeps policy restrictive. In the short-term, strong US data might weigh a bit on the market, but in the long-term weak data is likely to trigger bigger upside moves.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold fell below the 2430 level overnight without any clear catalyst. The sellers might now start to pile in with a defined risk above the 2430 level to position for a drop back into the 2277 support. The buyers, on the other hand, will likely look for dip-buying opportunities on the lower timeframes.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has now pulled back to the trendline that’s been defining the bullish momentum since the beginning of July. This is where we can expect the buyers to step in to position for the continuation of the uptrend. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 2277 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is near the lower bound of the average daily range, which makes it a nice risk to reward setup for the buyers. Today we don’t have any notable economic release on the agenda.
