Fundamental
Overview
Gold continues to find
support around some key technical levels as in the bigger picture it remains in
a bullish trend amid the Fed’s easing cycle. The corrections will likely be
triggered by the repricing in rate cuts expectations.
The next big event for Gold
will be the US CPI report due in two weeks. Higher than expected figures will
likely trigger another selloff, while lower than expected data should keep the
precious metal supported into new highs.
Overall, we shouldn’t
expect the same strong uptrend in gold going forward as we got used to in the
past couple of years as the conditions changed across the board.
In fact, the geopolitical
risk premium should ease with the Trump’s administration. Real yields might either
continue to fall slowly or just range for an extended period of time. Last but
not least, the new Treasury Secretary should reduce fears around the US fiscal
profligacy.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold dropped all the way back to the key support zone around the 2600 level where we had also
the major trendline. The price bounced there as the
buyers stepped in to position for a rally into a new all-time high. The sellers
will need the price to fall below the support to start pushing into new lows
with the next major trendline around the 2400 level as the natural target.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that the price is slowly recovering from the selloff triggered by the
Treasury Secretary nomination. We have a minor upward trendline defining the
current bullish momentum. If we were to get a pullback into it, we can expect
the buyers to lean on the trendline to position for new highs, while the
sellers will look for a break lower to target new lows.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor support zone around the 2656 level. This is where we
can expect the buyers to increase the bullish bets into new highs, while the
sellers will look for a break lower to position for a drop into the trendline. The
red lines define the average daily range for today.
See the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
