FUNDAMENTAL
OVERVIEW
Gold sank into monthly lows on Friday as real yields surged and we got broad risk-off flows heading into the weekend. There might have been some hedging due to Trump’s
hawkish remarks amid the prolonged negotiating deadlock.
Overall, the fundamentals haven’t changed at all. The main problem for gold
remains the Fed. Although the central bank is still keeping an easing bias, we
are now approaching a point where the Fed is likely to drop it entirely. If
nothing changes before the June meeting, we might be in for a hawkish surprise
as inflation continues to run hot and the US data remains resilient.
In the short-term, a resolution and the reopening of the Strait will likely
support gold on falling oil prices and increased rate cut bets. But if the
Strait remains closed for longer and oil prices stay elevated, the risk of the
Fed turning hawkish anyway increases.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold fell into May’s low but it’s still trading in the middle of the
two key trendlines, so there’s not much we can glean from this timeframe. 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 broke below the 4,650 support and the bearish momentum increased
as more sellers piled in. The price is now consolidating around the lows. The
buyers will likely step in here with a defined risk below the low to position
for a pullback into the 4,640 resistance. The sellers, on the other hand, will
want to see the price falling below the 4,500 level again to increase the
bearish bets into the 4,350 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the buyers will have a better risk to reward setup around
the lows to position for a pullback into the resistance, while the sellers will
wait for either a break below the 4,500 level or a rejection around the
resistance
