Fundamental
Overview
Gold continues to trade in
a tight range ahead of Powell’s speech and the NFP report in September. The
market participants continue to look for strong reasons to trigger a breakout
on either side. Right now, there’s still uncertainty around the interest rates
outlook as a hot NFP in September could flip expectations pretty quickly.
Last week, the market got
some support from the US CPI as the data came mostly in line with expectations.
In the following days though, we got some hottish data with the US PPI beating
expectations by a big margin, the US Jobless Claims improving further and the
inflation expectations in the UMich survey surprising to the upside.
That saw traders trimming
their aggressive rate cuts expectations and we got back to price 53 bps of
easing by year-end compared to 64 bps after the US CPI release. The focus has
now switched to Fed Chair Powell’s speech at the Jackson Hole Symposium on
Friday. Traders will be eager to see if he changes his stance as well. Most
likely though, he won’t pre-commit to anything and just reiterate that they
will decide based on the totality of the data.
In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
Fed easing. But hawkish repricing in interest rates expectations will likely
keep on triggering corrections in the short term.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold continues to trade right in the middle of the range defined by
the key 3,438 resistance and the 3,245 support. There’s
not much else we can glean from this timeframe as market participants will
likely continue to play the range until we get a breakout on either side. We
need to zoom in to see some more details.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that we have a minor support zone around the 3,330 level. That’s where the
buyers continue to step in with a defined risk below the support to position
for a rally back into the 3,438 resistance. The sellers, on the other hand,
will look for a break lower to pile in for a drop into the 3,245 support next.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a rally from the
support, while the sellers will look for a break and a drop into the next
support. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrowwe
have Fed’s Waller speaking and the FOMC meeting minutes. On Thursday, we get
the US Flash PMIs as well as the US Jobless Claims figures. Finally, on Friday,
we conclude the week with Fed Chair Powell speech at the Jackson Hole
Symposium.
