FUNDAMENTAL
OVERVIEW
We got a small pullback in
gold in the final part of the week following a couple of good US data. Overall,
the market pricing didn’t change much but the chances for a cut in January fell
further. The bullish momentum remains
intact for now, but the US NFP report today could challenge that.
In fact, if we get strong
data, we will likely see a bigger pullback in gold as traders pare back their rate
cut expectations. On the other hand, a soft report should give the market a
boost as rate cut bets could increase.
Moreover, the US Supreme
Court could rule on Trump’s tariffs today and that might also bring volatility
in case of a surprising decision. In case tariffs get struck down, gold will
likely fall amid easing stagflation risks. On the other hand, if tariffs are
kept in place, it shouldn’t change much although it would keep the upside
intact.
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 hawkish repricing
in interest rate expectations could weigh on the market.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold continues to edge higher amid lack of bearish catalysts. From a
risk management perspective, the buyers will have a better risk to reward setup
around the trendline to position for a rally into a new all-time high. The
sellers, on the other hand, will want to see the price breaking lower to pile
in for a drop into the 3887 level next.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see that we eventually got the pullback into the minor support zone around the
4400 level where the buyers stepped in with a defined risk below the trendline
to position for a rally into new all-time highs.
If we get another pullback
into the trendline, we can expect the buyers to lean on it to keep pushing into
new highs. The sellers, on the other hand, will want to see the price breaking below
the support to pile in for a drop into the major trendline around the 4275
level.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as we don’t have clear levels where to lean on except
the trendline. A break above the recent high at 4500 though could increase the
bullish momentum as more buyers will likely pile in, especially on a soft NFP
report
