Fundamental Overview
Gold eventually dropped by almost a hundred dollars following Trump’s victory and the red sweep as the market scaled back some more the expected rate cuts in 2025.
In fact, right now the market sees basically just two rate cuts in 2025 compared to the Fed’s projections of four.
In the bigger picture, gold remains in a bullish trend as real yields will likely continue to fall amid the Fed’s easing cycle. The pullbacks will likely be triggered by a repricing in rate cuts expectations but unless the Fed’s reaction function changes, the uptrend should remain intact.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold broke below the major trendline, retested it and then continued lower. The sellers are now in control and the natural target should be the next trendline around the 2600 level. The buyers, on the other hand, will want to see the price rising back above the broken trendline to start targeting a new all-time high.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we now have a downward trendline defining the current bearish momentum. If we were to get another pullback, the sellers will likely lean on the trendline and the 2700 resistance to position for a drop into the 2600 support. The buyers, on the other hand, will want to see the price breaking higher to position for a rally into a new all-time high.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance zone around the 2680 level. This is where we can expect the sellers to step in with a defined risk above the level to position for the drop into the 2600 level.
The buyers, on the other hand, will want to see the price breaking higher to target the break above the downward trendline. The red lines define the average daily range for today.
Upcoming Catalysts
This week is a bit empty on the data front with the most important releases scheduled for the latter part of the week. On Wednesday, we have the US CPI report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.
