Fundamental
Overview
Gold continues its
parabolic surge amid the lack of bearish catalysts. Right now, it’s just a
momentum play. The uncertainty around the renewed US-China trade war,
some concerns around regional bank loans and money markets stress, continues to
add support for the market.
If financial conditions tighten
because of these concerns though, we could see gold actually falling. This is
what generally happens in extreme conditions as inflation expectations crumble.
Nevertheless, the buyers
might want to decrease risk here or at least bet with lower size as such quick
spikes into a parabolic surge like we’ve seen tonight generally precede tops.
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.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold extended into yet another all-time high as the lack of bearish
catalysts keeps the bullish momentum intact. 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 on this
timeframe. If we were to get a pullback into it, we can expect the buyers to
lean on the trendline with a defined risk below it to position for a rally into
new highs. The sellers, on the other hand, will want to see the price breaking
lower to extend the drop into new lows.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have another minor upward trendline defining the bullish momentum
on this timeframe. The buyers will likely lean on the trendline to keep pushing
into new highs, while the sellers will look for a break lower to target the
next trendline around the 4,050 level. We have also a minor resistance around
the 4,380 level. If the price breaks above it, we could see the buyers increasing
the bullish bets again to target new highs
