The US real yields keep on rising non-stop and given the inverse correlation with Gold, we saw the precious metal falling non-stop as well. The economic data continues to show a resilient economy even after the second most aggressive tightening in history and this makes the market wonder if the Fed might need to do more. Overall, there are more bearish drivers for Gold than bullish ones at the moment, and we should keep seeing the downtrend continue unless the data starts to point towards a recession.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold has reached the 1893 low. This is where we can expect the buyers to step in with a defined risk below the level to target a bounce into the 1934 resistance. If the price breaks lower though, the sellers should pile in even more aggressively and target the 1805 swing low level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD for quite a while now. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, if we see a bounce, the pullback should end at the trendline where we can expect the sellers piling in to target a break below the 1893 low. If the price breaks higher though, it will confirm the reversal and the buyers should extend the rally into the 1934 resistance.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the setup with the trendline and the Fibonacci retracement levels for confluence. That’s the resistance area to watch as we either get a rejection or a breakout.
Upcoming Events
The only big event left for this week is the US Jobless Claims report today. Given that we are at a key support it looks like a clear setup. If we get a big beat, Gold is likely to break lower and fall. On the other hand, if we get a big miss, Gold should rally as treasury yields should fall after such a big rally.