Fundamental Overview
Yesterday, we got the US ISM Manufacturing PMI and even though the headline number missed expectations, under the hood the report was better than the prior month. The bad news was new orders falling further into contraction, which is a proxy for demand, and it’s generally considered as a leading indicator.
What weighed the most on gold might have been the selloff in the stock market. Gold generally suffers when there’s a notable selloff in the stock market as that tightens financial conditions. The technicals should give a better picture in the next days as we get more data.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold fell to the support zone around the 2480 level. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally into new highs. The sellers, on the other hand, will want to see the price falling below the 2480 level and the recent low at 2470 to increase the bearish bets into the 2430 level next.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the range between the 2480 support and the 2530 resistance. The price is now breaking below the 2480 level, but we still have the low at 2470 that could offer support, so the buyers will likely place their stops below that level. The sellers, on the other hand, will want to see the price falling below the 2470 level to position for a drop into the 2430 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a downward trendline defining the current bearish momentum. If the price pulls back to the trendline, we can expect the sellers to lean on it to position for a break below the 2470 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 2530 resistance. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Job Openings. Tomorrow, we get the US Jobless Claims figures and the ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP report.
