Fundamental Overview
Gold has been feeling the pressure from the rise in real yields in the last part of May which led to a drop and a consolidation around the 2340 level. More recently, the data showed that the inflation scare of the first part of the year seems to be in the rear-view mirror and therefore real yields dropped giving a boost to gold prices.
There’s no strong case for either a rally or a selloff right now, but the bias turned a bit more bullish, nonetheless. A very hot NFP report tomorrow might trigger another drop, but if there are no clear indications of inflationary pressures via wages, the market might eventually erase the losses. Conversely, a weak report should give the market another boost and take us to a new all-time high faster.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold has been consolidating around the 2340 level and got a boost recently as the data gave more confidence to the market that the inflation scare could be behind us.
From a risk management perspective, the buyers will have a better risk to reward setup around the 2277 support where we can also find the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the major trendline around the 2150 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the consolidation around the 2340 level. The price yesterday broke above the swing high at 2364, which should have switched the technical bias more to the bullish side.
This is where we can expect the buyers to step in with a defined risk below the level to increase the bullish bets into a new all-time high. The sellers, on the other hand, will want to see the price falling back below the level to pile in and target a drop back into the recent lows.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that in case the price falls below the 2364 level, the buyers will find support around the 2350 level where we can find the confluence of the swing level, the minor trendline and the 50% Fibonacci retracement level.
The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the lows and target a breakdown to new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US NFP report.
