KEY POINTS
- Stuck in a range between 4250 resistance and 4150 support
- Medium-term bias remains bullish, short-term bias to be decided by NFP/CPI
- Fed’s decision mostly as expected, Fed Chair Powell a bit dovish
FUNDAMENTAL OVERVIEW
Gold remains stuck in a range between the 4250 resistance and the 4150 support as market participants continue to play the range awaiting a breakout.
The Fed yesterday delivered on expectations cutting by 25 bps and signalling a higher bar for further rate cuts. Fed Chair Powell though sounded a bit dovish by downplaying the inflation risk and putting more focus on the labour market.
Next week, we get the key US NFP and CPI reports. Weak data is likely to keep supporting gold into new all-time highs, while strong data should trigger a bigger pullback. Today, we have also the US Jobless Claims report but it’s unlikely to be a game-changer unless we get big deviations, especially on the continuing claims side.
In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
the Fed’s dovish reaction function. But in the short term, a further hawkish
repricing in interest rate expectations should weigh on the market.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see clearly see the rangebound price action between the 4250 resistance and the 4150 support. The market participants will likely continue to play the range by buying at support and selling at resistance until we get a breakout on either side.
A break below the support and the trendline, should open the door for a move into the 4025 zone. That’s going to be the next support for the buyers where they will be looking for dip-buying opportunities.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as we just have a rangebound price action with no clear levels for to lean on to. It’s just about playing the range until a breakout or waiting for the key catalysts next week
