Fundamental Overview
Gold continues to find support around some key technical levels as in the bigger picture it remains in a bullish trend amid the Fed’s easing cycle. The corrections will likely be triggered by the repricing in rate cuts expectations.
The next big event for Gold will be the US CPI report due in two weeks. Higher than expected figures will likely trigger another selloff, while lower than expected data should keep the precious metal supported into new highs.
Overall, we shouldn’t expect the same strong uptrend in gold going forward as we got used to in the past couple of years as the conditions changed across the board.
In fact, the geopolitical risk premium should ease with the Trump’s administration. Real yields might either continue to fall slowly or just range for an extended period of time. Last but not least, the new Treasury Secretary should reduce fears around the US fiscal profligacy.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold dropped all the way back to the key support zone around the 2600 level where we had also the major trendline. The price bounced there as the buyers stepped in to position for a rally into a new all-time high. The sellers will need the price to fall below the support to start pushing into new lows with the next major trendline around the 2400 level as the natural target.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is slowly recovering from the selloff triggered by the Treasury Secretary nomination. We have a minor upward trendline defining the current bullish momentum. If we were to get a pullback into it, we can expect the buyers to lean on the trendline to position for new highs, while the sellers will look for a break lower to target new lows.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 2656 level. This is where we can expect the buyers to increase the bullish bets into new highs, while the sellers will look for a break lower to position for a drop into the trendline. The red lines define the average daily range for today.