Fundamental Overview
Not much has happened since the end of the Israel-Iran conflict which caused the geopolitical risk premium to vanish and weighed on gold as the safe haven flows reversed further. The price action remains mostly rangebound as we await the next catalysts to get a direction.
In the bigger picture, gold remains in an uptrend as real yields will likely continue to fall amid Fed easing and just a hawkish repricing in rate cuts expectations could trigger corrections in the short term.
The economic data in the next months will be particularly important for the gold market as Fed members sound inclined to cut earlier than expected or even more if the inflation data remains soft or the labour market data deteriorates further.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold continues to edge lower towards the major trendline. That’s where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 3120 level next.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor downward trendline defining the bearish momentum. From a risk management perspective, the sellers will have a better risk to reward setup around the trendline to position for a break below the major upward trendline. The buyers, on the other hand, will look for a break higher to increase the bullish bets into new highs.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have yet other minor trendline defining the bearish momentum on this timeframe. Again, the sellers would be better off leaning on the trendline with a defined risk above it to position for a break below the major trendline, while the buyers will target breakouts to increase the bullish bets into new highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we conclude the week with the US PCE price index and the Final University of Michigan Consumer Sentiment report.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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