FUNDAMENTAL
OVERVIEW
Gold has extended the
losses yesterday after a technical breakout of the recent consolidation. The
main thing that’s been weighing on precious metals has been the hawkish central
banks amid the renewed inflation risk.
That looks unlikely to
change anytime soon as Trump has rejected Iran’s proposal to first open the
Strait of Hormuz and then hold nuclear talks. Unfortunately, with US stock
prices at all-time highs Trump might not feel any pressure to concede.
This might even set the
stage for the next big selloff if the Strait of Hormuz remains closed for much
longer and oil prices stay elevated, thus forcing the Fed to hike interest
rates in the coming months.
Today, we have the FOMC
policy decision and although the Fed is expected to keep everything unchanged
amid the US-Iran uncertainty, there’s a risk of a more hawkish leaning due to
resilient US data and a longer than expected US-Iran war. A neutral Fed
shouldn’t bring much volatility, but a more hawkish one could add more pressure
on gold.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold extended the losses as the US-Iran stalemate pushed oil prices
back into triple digit levels. We are trading right in the middle of the two
key trendlines, so there’s no clear level where to lean on here. We need to
zoom in to see some more details.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see the price reached the first key swing level at 4,552 and started to
consolidate. We have a minor downward trendline defining the current bearish
momentum. If we get a pullback into the trendline, we can expect the sellers to
lean on it with a defined risk above it to keep pushing into new lows. The
buyers, on the other hand, will look for a break to pile in for a rally into
the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as from a risk management perspective, the sellers
will have a better risk to reward setup around the trendline. Nonetheless, we
can expect the buyers to continue to step in around the 4,552 level to keep
targeting the trendline, while a break lower will likely trigger a selloff into
the 4350 level next. Tomorrow, we get the US Q1 GDP,
the US Employment Cost Index and the latest US Jobless Claims figures
