Gold is still stuck in a range as the economic data remains mixed. We got very strong economic releases in August that led to a selloff in Gold as real yields and the US Dollar rose, ultimately weighing on the yellow metal. In the past couple of weeks though, the data started to weaken, especially on the labour market side and that led to a quick rebound in Gold. Last week, we got again two strong reports with the ISM Services PMI and Jobless Claims beating expectations by a big margin. As long as the data remains mixed, we are likely to see the rangebound price action continue with bullish impulses on weak readings and bearish impulses on strong figures.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold is basically stuck in a range between the 1984 resistance and the 1893 support. We recently got a selloff from the 1950 level, but the price found support and bounced on the red 21 moving average. If the US data keeps on deteriorating, we can expect another rally into the 1984 resistance, conversely, if the data comes out strong, Gold is likely to fall back into the 1893 support.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the bearish momentum has waned and the price started to consolidate between the 1915 and the 1929 levels. In such instances, it’s better to wait for a breakout and then go with the flow. As long as the price stays below the 1934 level though, the bias will remain bearish.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we recently got a divergence with the MACD which was a signal that the bearish momentum was indeed waning and we could see a pullback or reversal soon. More aggressive sellers are likely to pile in around the upper bound of the range with a defined risk above the level to position for a fall into the 1893 support. The buyers, on the other hand, will want to see the price breaking higher to pile in and position for a rally into a new higher high.
Upcoming Events
This week is likely to be a volatile one given the release of top tier economic indicators including the US CPI. In fact, on Wednesday we get the US CPI report, which is expected to show an acceleration in the headline inflation but a deceleration in the core measure. On Thursday, we get the US PPI, Retail Sales and Jobless Claims data. Finally, we conclude the week with the University of Michigan Consumer Sentiment report on Friday. Strong readings are likely to weigh on Gold while weak figures should give the yellow metal a boost.
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