Fundamental
Overview
Gold continues to pull back
from the highs reached after the first Israel attack against Iran despite renewed
tensions over the weekend following US strikes.
It looks like the market
continues to bet on de-escalation, which is also what transpires from the crude
oil market which remains rangebound. Traders continue to monitor the Strait of Hormuz
where disruptions could take oil prices much higher. As of now, there are no
disruptions.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall amid Fed
easing and just a hawkish repricing in rate cuts expectations could trigger
corrections in the short term.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold continues to edge lower towards the major trendline despite increased tensions in
the Middle East after the US strikes over the weekend. From a risk management
perspective, the buyers will have a much 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 increase the bearish
bets into the 3120 level next.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see the choppy price action of the last few days and the positive opening gap today
that got erased throughout the Asian session. There’s not much else we can glean
from this timeframe, so we need to zoom in to see some more details.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that the price has been bottoming out around the 3345 zone. This process formed
what looks like an inverted head
and shoulders pattern, so we can expect the buyers to step in around these
levels with a defined risk below the zone to position for a rally into a new
all-time high.
The sellers, on the other hand,
will look for a break to the downside to invalidate the bullish setup and pile
in for a drop into the major upward trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we get the US Flash PMIs. Tomorrow, we have the US Consumer
Confidence report and Fed Chair Powell Testimony. On Thursday, we get the latest
US Jobless Claims figures and the Final US Q1 GDP report. On Friday, we
conclude the week with the US PCE price index and the Final University of
Michigan Consumer Sentiment report.
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