Fundamental Overview
Gold failed to extend the rally above the resistance zone around the 2723 level and pulled back as we got a technical break, and the US PPI came in higher than expected.
In the bigger picture, the market’s pricing remained largely unchanged around three rate cuts by the end of 2025 but the rise in real yields weighed on the market as some inflation fears are starting to build up.
Moreover, we have the FOMC decision next Wednesday and although the central bank will likely match the market’s pricing, we could have an overall hawkish event. The market participants might want to err on the defensive side which could limit the upside in gold.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold rejected the resistance zone around the 2723 level and extended the drop into the 2675 level as the US PPI surprised to the upside. The buyers will want to see the price breaking above the resistance to increase the bullish bets into a new all-time high, while the sellers will look for technical breaks on lower timeframes to keep pushing into new lows.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong support zone around the 2660 level which acted as resistance in the previous range. If we get a pullback into it, we can expect the buyers to step in with a defined risk below the support to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 2600 level next.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price broke below the upward trendline yesterday that was defining the bullish momentum on this timeframe. The sellers piled in on the breakout and increase the momentum as the US PPI beat expectations.
We have now some consolidation around the 2680 level which might turn into a bear flag if the price were to break below the counter-trendline. In such a case, we can expect another flush lower into the 2660 support. The red lines define the average daily range for today.