Fundamental Overview
Gold is pulling back a bit now after an almost 8% selloff since the US election day. The market didn’t react hawkishly after another hot US PPI report and an acknowledgement from Fed Chair Powell that they can proceed carefully on rate cuts.
The market might be fine with just two rate cuts priced in for 2025 and will need some stronger reasons to price out those as well. For now, the correction looks to be losing steam and might even be over.
In the bigger picture, gold remains in a bullish trend as real yields will likely continue to fall amid the Fed’s easing cycle, but the short-term corrections will be triggered by a repricing in rate cuts expectations.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold broke through the key trendline around the 2600 level and extended the drop into the 2536 level. If we get a bigger pullback, the sellers will likely step in around the broken trendline and the swing low level at 2600. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into a new all-time high.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a downward trendline defining the current bearish momentum. The sellers will likely lean on it to position for new lows, while the buyers will look for a break higher to increase the bullish bets into the 2600 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the sellers will look for a rejection around the trendline and the buyers will look for a break to the upside. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we conclude the week with the US Retail Sales data.
