Fundamental Overview
The price action in gold continues to be rangebound amid some mixed drivers. The real yields rose recently and that kept a lid on the upside, but there was no signal of inflationary pressures in the economic data and interest rates expectations remained unchanged.
There is a compelling narrative emerging since the Trump-Biden debate that Trump has basically already won the elections and his policies will be inflationary. That would keep real yields higher for longer or even lead to a sizeable increase.
Although, this narrative has some good arguments, it looks premature to price in such developments now given that the context is different. The market might have moved on it so much mainly because there was nothing else happening.
In the next weeks though we will get many key economic releases including the NFP and CPI, so it will be interesting to see how the market will react to these catalysts.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold continues to maintain a rangebound price action. From a risk management perspective, the buyers will have a better risk to reward setup around the key 2277 support zone 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 below the support to change the bias and increase the bearish bets into the next support around the major trendline where we can also find the 61.8% Fibonacci retracement level for confluence.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is now trading inside a tight range between the 2320 level and the 2337 resistance. The buyers will want to see the price breaking higher to gain more conviction and position for a rally into the 2387 level next. The sellers, on the other hand, will want to see the price breaking lower to keep targeting a drop into the 2277 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the tight range as we await the key catalysts in the next days. If the price stays below the 2320 level, it will keep the bias more bearish in the short term, while staying above the 2337 level would keep it more bullish. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Job Openings and Fed Chair Powell speaking. Tomorrow, we get the US ADP, the US Jobless Claims, the US ISM Services PMI and the FOMC Meeting Minutes. Thursday is going to be a US Holiday for Independence Day. Finally, on Friday, we conclude the week with the US NFP report.
