On the daily chart below, we can see that gold keeps on slowly trending downwards. After the break of the big upward trendline that defined the uptrend since November 2022, the precious metal just kept on losing ground.
The moving averages have crossed to the downside signalling a change in trend. The culprit was the blockbuster NFP report and the subsequent hot key economic data that made the market to reprice higher future interest rates expectations. Gold is inversely correlated with real yields, so the recent rise in real yields is giving gold a hard time.
On the 4 hour chart below, we can see how gold’s price action has been clean recently with downside extensions followed by pullbacks to the broken supports turned resistances.
If the economic data keep on surprising upwards, then we will most likely see even lower prices going forward. On the other hand, if we start to get misses, then the market may think that the January data was indeed just a blip, and we should see higher prices instead.
On the 1 hour chart below, we can see that right now the price is trading around the support zone at 1825. A clean break below, especially if supported by a fundamental catalyst, will give sellers conviction for lower lows, possibly finding some support at the 1800 round number.
For the buyers, on the other hand, a bigger bounce from the current support accompanied by a new higher high and the moving averages crossing upwards, should give conviction for a move towards the resistance at 1855.
