Fundamental
Overview
After a brief consolidation
in the first part of the week, gold eventually broke out into a new all-time
high and surged by more than 3% in just a day. The precious metal has been the
only game in town recently as the uncertainty and risk off flows haven’t even
supported bonds, which generally rise during such times.
But these are not normal
times because the market is fearing stagflation, which hasn’t been seen for
decades. This is an environment where you have lower growth and higher
inflation. Gold thrives during such times. The problem is that “long gold” is
now the most crowded trade, and such parabolic rallies can be wiped out fast if
conditions change.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall as the Fed is
not looking to hike anymore. The risks for the upside in the short term include
another aggressive stock market selloff, a hawkish Fed or positive news on the
tariffs side.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that after a brief consolidation, gold skyrocketed once again into new
all-time highs. The
sellers, on the other hand, will want to see the price breaking below the
trendline and the 2957 level to extend the drop into the 2832 level next.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on this
timeframe. The buyers will likely lean on the trendline to keep pushing into
new highs, while the sellers will look for a break lower to extend the pullback
into the 3195 level next.
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
trendline, while the sellers will look for a break. But as a reminder, the market is focused on tariff negotiations at the
moment, so the data is not as market-moving as it used to be in the past
months. So, we will likely need at least a new cycle high in the Jobless Claims
data to trigger a notable reaction
