Fundamental
Overview
We had a wave of
profit-taking yesterday on gold and other precious metals that wasn’t triggered
by any clear catalyst. Maybe silver making the headlines for breaking into a
new all-time high caused it, but there was no fundamental catalyst.
For now, the market continues
to move by inertia, and given the US government shutdown, there’s not much
stopping this train. The BLS announced that it will release the US CPI report
despite the shutdown, but it will likely be postponed from the original date.
That might be a risk for
the bulls as higher than expected data could trigger a hawkish repricing and
lead to a bigger pullback.
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. In the short-term though, a hawkish repricing
in interest rates expectations will likely trigger a correction.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold had a negative day yesterday due to some profit-taking. This
rally went so much parabolic that it’s basically useless to look at the daily
timeframe at the moment, so we need to zoom in to see some more details.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum. The buyers
will likely lean on the trendline with a defined risk below it to keep pushing
into new all-time highs. The sellers, on the other hand, will look for a break
lower to extend the pullback into the 3,819 level next.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor resistance zone around the 4,000 level. That’s where
we can expect the sellers to step in with a defined risk above the resistance
to position for a break below the trendline. The buyers, on the other hand,
will look for a break higher to increase the bullish bets into new highs
