Last week, Gold was about to break above the 1934 resistance but got smacked back down following the more hawkish than expected FOMC Dot Plot. There’s still lots of uncertainty in the market around interest rates as the Fed is aiming for the soft-landing scenario going cautious on the tightening front, but the resilient economy and strong labour market might force the Fed to do more than expected. This uncertainty led to a rangebound price action in Gold and the market is taking it data by data with strong readings causing selloffs and weak figures leading to rallies.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that the rangebound price action continues in Gold as the market awaits some strong catalyst to start moving sustainably into a certain direction. There’s no hint we can get from the daily chart as the price just moves sideways and the moving averages are so tight that it looks like a single moving average. The recent rejection from the 1934 level suggests that we might revisit the 1893 support though.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that after the strong rejection from the 1934 level, the price made a new lower low on this timeframe leaving behind a fakeout, which is usually a reversal pattern. The price last Friday pulled back to the red 21 moving average where we had also the confluence with the previous swing level and the 38.2% Fibonacci retracement level. That’s where the sellers piled in with a defined risk above the resistance to position for a fall into the 1893 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the short term momentum is skewed to the downside as the price is printing lower lows and lower highs and the moving averages are crossed to the downside. We can expect more sellers coming into the market here with even more selling pressure if the price breaks below the low around the 1914 level. The buyers, on the other hand, will want to see the price breaking above the resistance around the 1928 level to position for more upside and try a rally into the 1984 level.
Upcoming Events
This week is pretty bare on the data front with just a couple of notable economic releases. Tomorrow, we will get the latest US Consumer Confidence report while on Thursday we will see again the US Jobless Claims data. On Friday, we conclude the week with the US PCE data. Strong data is likely to weigh on Gold while weak readings should support it.
