Gold continues to rise amid a lack of bearish
catalysts and pretty stable price action in real yields and the US Dollar. In
fact, the market has already priced out the aggressive rate cuts and it’s now
in line with the Fed’s projection of three rate cuts. In the big picture, Gold
should remain supported as we head into the easing cycle but in the short term
it could come under pressure if the data comes out hot and makes the market to
expect even less rate cuts than the Fed’s projection.
Gold Technical Analysis –
Daily Timeframe
Gold Daily
On the daily chart, we can see that Gold is
approaching a key trendline around
the 2045 level. This is where we can expect the sellers to step in with a
defined risk above the trendline to position for a drop into new lows. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into the 2080 resistance.
Gold Technical Analysis – 4
hour Timeframe
Gold 4 hour
On the 4 hour chart, we can see that the price is diverging with the
MACD as it
approaches the key trendline. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it could be an extra
bearish signal for the market and another confluence for the
sellers. The buyers will need the price to break decisively above the trendline
to invalidate the bearish setup and increase the bullish bets into the 2080
resistance.
Gold Technical
Analysis – 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can see that the
price is indeed losing momentum as the price action became rangebound as
depicted by the blue box. There’s not much to do here other than waiting for
the price to reach the key trendline.
Upcoming Events
Today we will see the US PCE and the latest US
Jobless Claims figures, while tomorrow we conclude the week with the US ISM
Manufacturing PMI. Strong data is likely to weigh on Gold while weak figures
should give it a boost.