Fundamental Overview
Gold got a boost from the benign US CPI report on Wednesday where the data came in line with expectations. The market firmed up the rate cuts expectations with September and December now fully priced in. The Treasury yields and the US Dollar weakened as a result supporting gold prices. In the bigger picture, nothing has changed, so the path of least resistance should remain to the upside for now.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold is slowly climbing back to the all-time high as the US data calmed the fears around inflation and rate hikes. From a risk management perspective, the buyers will certainly have a much better risk to reward setup around the 2150 level where we can find the confluence of the trendline and the 61.8% Fibonacci retracement level, but we haven’t got any catalysts to trigger such a big correction.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price pulled back after the rally following the US CPI release and bounced on the trendline around the 2375 level. This is where the buyers are piling in with a defined risk below the trendline to position for an extension into the all-time high at 2430.
If the price were to break lower, that would be a signal that the bullish momentum has waned, and the sellers will likely pile in to target a drop into the next support around the 2355 level where we can find the confluence of another trendline and the 61.8% Fibonacci retracement level. That’s where the buyers will have another chance to position for a rally into the all-time high with an even better risk to reward setup.
Upcoming Catalysts
We don’t have anything on the calendar for today, so the market will likely consolidate into the weekend.
