Fundamental
Overview
Gold yesterday extended the
rally into yet another all-time high. The market continues to move by inertia
given the lack of bearish catalysts. Nothing has changed since the FOMC
decision and traders are waiting for the jobless claims data tomorrow and the
NFP report next week for the next move. Strong data will likely weigh on gold and should offer a pullback, while weak figures should keep on supporting the upside.
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, hawkish repricing
in interest rates expectations caused by strong US data will likely keep on triggering
corrections.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold extended into yet another all-time high yesterday before pulling
back a bit. Such a big correction
though, will likely need strong US data to trigger a hawkish repricing in
interest rates expectations.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have another minor upward trendline defining the bullish momentum
on this timeframe. If we get a pullback into the trendline, we can expect the
buyers to lean on it with a defined risk below it 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 major trendline next. The price can break on either side of the pattern and it’s
generally followed by a more sustained move. On
Friday, we conclude the week with the US PCE report
