FundamentalOverview
Gold got hit hard last Friday by the strong USPMIs as real yields rose following the data release. The report thoughshowed that inflationary pressures continue to abate and that’s also the reasonwhy the market’s expectation for interest rates remained unchanged. Theoverreaction from the US PMIs is getting slowly erased this week as the marketdigests the data.
As of now, it looks like gold have limited downside but lots of upside asinflation abates slowly while risks to the growth picture increase the longerthe Fed keeps policy restrictive. In the short-term, strong US data might weigha bit on the market, but in the long-term weak data is likely to trigger biggerupside moves.
GoldTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that gold has been mostly rangebound although the market maintains abullish bias. From a risk management perspective, the buyers will have a betterrisk to reward setup around the key 2277 supportzone where we can also find the 38.2% Fibonacciretracement level for confluence.
The sellers, on the otherhand, will want to see the price breaking below the support to change the biasand increase the bearish bets into the next support around the major trendline where we can also find the 61.8% Fibonacciretracement level for confluence.
Gold Technical Analysis– 4 hour Timeframe
On the 4 hour chart, we cansee more clearly the rangebound price action around the 2325 zone where we canalso find an upward trendline adding some extra support. This is where we canexpect the buyers to step in trying to fade the overreaction from the US PMIsand position for a rally into the 2387 level next.
The sellers, on the otherhand, will want to see the price breaking below the upward trendline toincrease the bearish momentum and position for a drop into the key 2277support.
Gold Technical Analysis– 1 hour Timeframe
On the 1 hour chart, we cansee the selloff triggered by the US PMIs and the consolidation around the 2325 level.A break above the 2335 level should give the buyers more confidence to pile in asthe momentum would turn more bullish. The red lines define the averagedaily range for today.
UpcomingCatalysts
Today we have the US Consumer Confidence report where the market will befocused on the labour market details. On Thursday, we get the latest US JoblessClaims figures, while on Friday we conclude the week with the US PCE.
