Fundamental Overview
Gold remains mostly rangebound but with a bullish tilt given that in the bigger picture real yields will likely continue to fall amid Fed easing and just a repricing in rate cuts expectations could weigh on it in the short term.
That repricing hasn’t taken place as the data continues to favour at least two rate cuts for the Fed this year. In fact, yesterday we got a lower than expected US CPI report, which saw the market erasing some of the slightly more hawkish bets after the US NFP.
Late in the afternoon, we’ve also got some Middle East tensions that boosted the precious metal on safe haven flows but it seems like the news of a potential Israel attack against Iran was exaggerated. Nevertheless, it’s worth to keep an eye on that front.
Today, we have the US PPI and the US Jobless Claims data that could impact the price of gold. Dovish figures should keep on supporting the market into new highs, while hawkish data might weigh on it in the short term.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold pulled back to retest the broken downward trendline and bounced as the buyers continue to target the 3438 level. The sellers might want to wait for the price to come into that level to position for a drop into the major upward trendline with a better risk to reward setup.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below the trendline to position for the rally into the 3438 level. The sellers, on the other hand, will look for a break lower to pile in for a drop into the 3245 level next.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the current setup but there’s not much else we can add here as the buyers will have a better risk to reward setup around the trendline, while the sellers will look for a break lower to target a bigger pullback to the downside. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we get the latest US Jobless Claims figures and US PPI. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment report.
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This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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