Fundamental
Overview
The price action in gold in
the last few trading days has been all over the place. We saw a strange rally following
the strong US
NFP report and a drop to erase all the gains yesterday despite the lack of
key catalysts.
We now have the US PPI and
CPI reports ahead and those will likely set the trend for the next weeks. The
market pricing is now erring on the hawkish side compared to the Fed’s
projections as the market sees just one cut by the end of the year.
Hot data could trigger a
big selloff unless the market becomes concerned about the Fed’s willingness to
do whatever it takes to get inflation back to target. On the other hand, soft
data should lead to a rally as the market will likely pull back from the
aggressive hawkishness.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold continues to trade inside the range between the 2600 support and the 2721 resistance. The price has been
slowly edging higher from the support as the buyers continue to push towards
the resistance. We have two big risk events ahead with the US PPI today and the
US CPI tomorrow. They will likely set the trend for the news weeks.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
that the price came back yesterday to retest the middle of the range around the
2660 level. This is where we can expect the buyers to step in with a defined
risk below the level to position for a rally into the resistance. The sellers,
on the other hand, will look for a break lower to target a drop into the 2600
support.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a bounce around the middle
of the range, while the sellers will look for a fall below it to increase the
bearish momentum. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we get the US PPI data. Tomorrow, we have the US CPI report. On
Thursday, we get the latest US Jobless Claims figures.
Watch the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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