Fundamental
Overview
Gold erased last week’s losses
in just a couple of days. It’s unclear what was the catalyst though. I can cite
the usual “dollar weakness, safe haven demand” reasons but those don’t help
with market timing.
The most plausible explanation
could be the recent volatility in some Asian currencies which would explain the
timing and the safe haven demand. Authorities are now intervening so we could
see an ease in the safe haven demand.
We have also the FOMC
decision tomorrow and that could be a risk for the bulls as the Fed is likely
to push back against the aggressively dovish market pricing.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall amid Fed
easing. But in the short-term more positive news on the tariffs front and a
hawkish Fed could trigger more downside for gold as the market readjusts to new
conditions.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold bounced around the 3200 level and pulled all the way back to the key
swing level at 3370. This is where we can expect the sellers to step in with
a defined risk above the high to position for a drop into the major trendline.
The buyers, on the other hand, will want to see the price breaking into a new
high to increase the bullish bets into a new all-time high.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum. The
buyers will likely continue to lean on the trendline to keep pushing into new
highs, while the sellers will look for a break lower to target a drop back into
the 3258 level. Tomorrow, we have
the FOMC Rate Decision, while on Thursday, we get the latest US Jobless Claims
figures
