Fundamental Overview
Yesterday, gold dropped during the American session without any clear catalyst. Real yields rose following the US NFP report and that weighed on the market. After some resistance, the price eventually caught up with higher real yields dropping to a new two-weeks low.
Tomorrow, we have the US CPI report and that could be a catalyst for either a rally or a selloff. If we get an upside surprise in the data, then we will likely see new lows in gold. Conversely, a very soft report might trigger another rally and take us to a new all-time high.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold is getting close to the trendline. This is where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price yesterday broke below the recent low, retested it, and continued lower. The buyers will want to see the price getting back above the 2625 level to position for a rally into new highs, while the sellers will likely keep on targeting the trendline for now.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have the lower bound of the average daily range for today standing right around the trendline. That should cap the losses in case the price falls to the trendline today. Then, the US CPI report tomorrow will likely decide if we rally or sell off some more.
Upcoming Catalysts
Today we have the FOMC Meeting Minutes. Tomorrow, we get the US CPI report and the US Jobless Claims figures. On Friday, we conclude with the US PPI and the University of Michigan Consumer Sentiment report.
