Fundamental
Overview
Last Friday, gold had a
very positive day despite a lack of catalysts, which culminated in a breakout
of a key resistance that’s been holding the precious metal in a range for a
month.
In the big picture, gold
should remain supported as real yields fall as we head into the Fed’s easing
cycle, but in the short-term a bigger pullback due to some repricing in the aggressive
rate cuts expectations seemed justified.
Unfortunately, that was not
the case as the price faded the weakness from the strong US data and reached a
new all-time high.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold eventually managed to break above the key resistance zone around the 2480 level and
extended the gains into the 2500 level as more buyers piled in.
The buyers are now in control
and the breakout should give them more conviction to target new highs. The
sellers, on the other hand, will want to see the price falling back below the
2480 level to invalidate the breakout and position for a drop into the 2360
level.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see more clearly the last Friday’s breakout. If the price were to pull back to
retest the resistance
now turned support, the buyers will likely lean on it with a defined risk
below it to position for new highs with a better risk to reward setup.
The sellers, on the other
hand, will want to see the price falling below the support to position for a
drop into the upward trendline
first and, upon a break lower, increase the bearish bets into the 2360 level.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have the confluence of a minor upward trendline around the support
zone. This should strengthen that price area and give the buyers more
conviction for a bounce in case the price were to fall back there. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today we have Fed’s Waller speaking. On Thursday we get the US Jobless Claims
figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking
at the Jackson Hole Symposium.
See the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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