Fundamental Overview
Yesterday, gold got a boost from the soft US CPI report as real yields and the US Dollar dropped following the data release. Unfortunately, the gains were erased later in the day as we got a bit more hawkish than expected FOMC decision.
Zooming out though, the Fed decision didn’t change much as Fed Chair Powell backpedalled on the hawkish projections saying that they remain very data dependent and that they don’t have a high confidence in their forecasts.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold bounced near the key support zone around the 2277 level where we had also the 38.2% Fibonacci retracement level for confluence. This is the level the sellers will need to break to turn the bias more bearish and open the door for a drop into the major trendline around the 2150 level. For now, the buyers remain in control.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price probed above the resistance zone around the 2320 level yesterday following the US CPI release but eventually fell back below it due to the more hawkish than expected FOMC decision.
The buyers will want to see the price rallying back above this zone to gain back the conviction and increase the bullish bets into the all-time high. The sellers, on the other hand, will likely lean on this resistance with a defined risk above it to position for a drop into the 2277 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price broke the minor trendline that was defining the short-term uptrend. This has switched the bias a bit more bearish, so we will need the price to rally back above the resistance zone and the trendline to invalidate it. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US PPI and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment survey.
