Fundamental
Overview
Gold extended the rally into
yet another all-time high today given the lack of bearish catalysts. The
uncertainty around the recent renewed US-China trade war also added further support
to the market.
The market has just been
driven by inertia lately as we haven’t got not even one single bearish catalyst.
As of now, we would likely need a significant escalation in US-China trade war
to trigger a bigger pullback in gold as the drop in inflation expectations and
recessionary fears should weigh on the market.
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.
Gold
Technical Analysis – Daily Timeframe
Gold daily
On the daily chart, we can
see that gold extended into yet another all-time high as the lack of bearish
catalysts keeps the bullish momentum intact. This rally went so much parabolic
that it’s basically useless to look at the daily timeframe at the moment, so 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 an upward trendline defining the bullish momentum on this timeframe.
If we were to get a pullback into it, we can expect the buyers to lean on the
trendline with a defined risk below it to position for a rally into new highs.
The sellers, on the other hand, will want to see the price breaking lower to
extend the drop into new lows.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on this
timeframe. The buyers will likely continue to lean on it to keep pushing into
new highs, while the sellers will look for a break lower to target a pullback
into the 4,089 level. That’s where we can expect the buyers to step in again
for the first dip-buying opportunity. The red lines define the average daily range for today.
Upcoming
Catalysts
We don’t have key
data releases this week given the US government shutdown. The Fed speakers
continue to repeat the same old stuff. As of now, we know that only the US CPI
will be published despite the shutdown, which is scheduled for Friday October
24. At the moment, the markets are solely focused on US-China headlines.
