Fundamental Overview
Yesterday, gold reached a new all-time high as it continues to be supported by the steady fall in real yields. The breakout of the three-month range might now attract momentum players and take us to even higher highs.
As of now, it looks like gold have limited downside but lots of upside as inflation abates slowly while risks to the growth picture increase the longer the Fed keeps policy restrictive. In the short-term, strong US data might weigh a bit on the market, but in the long-term weak data is likely to trigger bigger upside moves.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold yesterday broke through the 2430 resistance and extended the rally into a new all-time high. This breakout of the three-month long range should see the buyers piling in with more conviction. The sellers, on the other hand, will want to see the price falling back below the 2430 level to position for a drop back into the 2277 support.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we now have a nice support zone around the 2440 level where we can find the confluence of the previous all-time high and the trendline. This is where we can expect the buyers to pile in to position for the continuation of the uptrend. The sellers, on the other hand, will want to see the price breaking below the trendline and the 2430 level to position for a drop into the 2277 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that it’s now about timing the entry for the buyers as the price might just keep going without providing decent pullbacks. The trendline looks like the best place in terms of risk-reward, but more aggressive buyers might just pile in around these levels with a bigger stop below the 2430 level as this should be a long term trade. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed’s Waller speaking while tomorrow we conclude with the latest US Jobless Claims figures.